If investors are looking at the Small Cap Growth fund category, JPMorgan Small Cap Growth Fund A (PGSGX Quick QuotePGSGX - Free Report) could be a potential option. PGSGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

PGSGX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.

History of Fund/Manager

J.P. Morgan is based in Boston, MA, and is the manager of PGSGX. Since JPMorgan Small Cap Growth Fund A made its debut in July of 1991, PGSGX has garnered more than $444.15 million in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 14.2%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 22.57%, which places it in the top 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. PGSGX's standard deviation over the past three years is 18.1% compared to the category average of 10.41%. The standard deviation of the fund over the past 5 years is 18.9% compared to the category average of 10.69%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PGSGX's case, the fund lost 55.68% in the most recent bear market and underperformed its peer group by 3%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Investors should note that the fund has a 5-year beta of 1.33, so it is likely going to be more volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -0.17, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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.

This fund is currently holding about 92.19% stock in stocks, and these companies have an average market capitalization of $3.93 billion. The fund has the heaviest exposure to the following market sectors:

1. Health
2. Industrial Cyclical
3. Technology
4. Other

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, PGSGX is a load fund. It has an expense ratio of 1.24% compared to the category average of 1.23%. Looking at the fund from a cost perspective, PGSGX is actually more expensive than its peers.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.

Bottom Line

Overall, JPMorgan Small Cap Growth Fund A ( PGSGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, JPMorgan Small Cap Growth Fund A ( PGSGX ) looks like a good potential choice for investors right now.

For additional information on the Small Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PGSGX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.