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Is Kinetics Small Cap Opportunity No Load (KSCOX) a Strong Mutual Fund Pick Right Now?

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Global - Equity fund seekers should not consider taking a look at Kinetics Small Cap Opportunity No Load (KSCOX - Free Report) at this time. KSCOX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes KSCOX as Global - Equity, which is a segment packed with options. Global - Equity mutual funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. They also provide an investment technique that leverages the diverse nature of the global economy in the hopes of providing a stable return.

History of Fund/Manager

Kinetics is based in Sleepy Hollow, NY, and is the manager of KSCOX. Kinetics Small Cap Opportunity No Load debuted in February of 2003. Since then, KSCOX has accumulated assets of about $220.03 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 25.54%, and it sits 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 21.46%, which places it in the middle 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. KSCOX's standard deviation over the past three years is 35.91% compared to the category average of 17.67%. Looking at the past 5 years, the fund's standard deviation is 28.38% compared to the category average of 14.54%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. KSCOX has a 5-year beta of 1.36, 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. Over the past 5 years, the fund has a positive alpha of 3.48. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, KSCOX is a no load fund. It has an expense ratio of 1.64% compared to the category average of 1.13%. From a cost perspective, KSCOX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.

Bottom Line

Overall, Kinetics Small Cap Opportunity No Load ( KSCOX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.

For additional information on the Global - Equity 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 KSCOX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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