Any investors hoping to find a Small Cap Growth fund might consider looking past Wasatch Ultra Growth (
WAMCX Quick Quote WAMCX - Free Report) . WAMCX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance. Objective
The world of Small Cap Growth funds is an area filled with options, such as WAMCX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
WAMCX is a part of the Wasatch family of funds, a company based out of Salt Lake City, UT. Wasatch Ultra Growth debuted in August of 1992. Since then, WAMCX has accumulated assets of about $2.14 billion, according to the most recently available information. John Malooly is the fund's current manager and has held that role since January of 2012.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 30.03%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 37.77%, 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. WAMCX's standard deviation over the past three years is 26.27% compared to the category average of 19.92%. The standard deviation of the fund over the past 5 years is 22.42% compared to the category average of 16.85%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. WAMCX has a 5-year beta of 1.23, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a positive alpha over the past 5 years of 10.8, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, WAMCX is a no load fund. It has an expense ratio of 1.19% compared to the category average of 1.22%. WAMCX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $100.
Overall, Wasatch Ultra Growth ( WAMCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on WAMCXin the Small Cap Growth category. Consider going to
www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.