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Is Hodges Small Cap Fund Institutional Class (HDSIX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Small Cap Blend fund? Well, Hodges Small Cap Fund Institutional Class (HDSIX - Free Report) would not be a good potential starting point right now. HDSIX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes HDSIX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Hodges Capital is based in Dallas, TX, and is the manager of HDSIX. Hodges Small Cap Fund Institutional Class made its debut in December of 2008, and since then, HDSIX has accumulated about $79.17 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.53%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.15%, which places it in the bottom third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of the fund over the past 5 years is 18.61% compared to the category average of 1.11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, with a 5-year beta of 1.31, the fund is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. HDSIX's 5-year performance has produced a negative alpha of -9.64, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 89.54% stock in stocks, and these companies have an average market capitalization of $3.83 billion. The fund has the heaviest exposure to the following market sectors:
Industrial Cyclical
Retail Trade
Finance
Other
With turnover at about 81%, this fund is making fewer trades than the average comparable fund.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, HDSIX is a no load fund and it has an expense ratio of 1.04%.
Investors should also note that the minimum initial investment for the product is $1 million and that each subsequent investment needs to be at $100.
Bottom Line
With a 'strong sell' rank, Hodges Small Cap Fund Institutional Class is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Small Cap Blend right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in HDSIX turnaround in the next data release.
Don't stop here for your research on Small Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare HDSIX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Hodges Small Cap Fund Institutional Class (HDSIX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Small Cap Blend fund? Well, Hodges Small Cap Fund Institutional Class (HDSIX - Free Report) would not be a good potential starting point right now. HDSIX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes HDSIX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Hodges Capital is based in Dallas, TX, and is the manager of HDSIX. Hodges Small Cap Fund Institutional Class made its debut in December of 2008, and since then, HDSIX has accumulated about $79.17 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.53%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.15%, which places it in the bottom third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of the fund over the past 5 years is 18.61% compared to the category average of 1.11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, with a 5-year beta of 1.31, the fund is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. HDSIX's 5-year performance has produced a negative alpha of -9.64, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 89.54% stock in stocks, and these companies have an average market capitalization of $3.83 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
- Retail Trade
- Finance
- Other
With turnover at about 81%, this fund is making fewer trades than the average comparable fund.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, HDSIX is a no load fund and it has an expense ratio of 1.04%.
Investors should also note that the minimum initial investment for the product is $1 million and that each subsequent investment needs to be at $100.
Bottom Line
With a 'strong sell' rank, Hodges Small Cap Fund Institutional Class is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Small Cap Blend right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in HDSIX turnaround in the next data release.
Don't stop here for your research on Small Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare HDSIX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.