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Is Invesco Small Cap Value Y (VSMIX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with Invesco Small Cap Value Y (VSMIX - Free Report) . VSMIX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Invesco is responsible for VSMIX, and the company is based out of Kansas City, MO. Invesco Small Cap Value Y made its debut in August of 2005, and since then, VSMIX has accumulated about $1.39 billion in assets, per the most up-to-date date available. The fund's current manager, Jonathan Mueller, has been in charge of the fund since June of 2010.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.52%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 16.73%, 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. Over the past three years, VSMIX's standard deviation comes in at 34.69%, compared to the category average of 19.7%. The fund's standard deviation over the past 5 years is 31.24% compared to the category average of 17.31%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.42, so it is likely going to be more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VSMIX's 5-year performance has produced a negative alpha of -0.56, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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 77.4% stock in stocks, with an average market capitalization of $6.12 billion. The fund has the heaviest exposure to the following market sectors:

  • Industrial Cyclical
  • Technology
  • Other
  • Energy
Turnover is 79%, which means, on average, the fund makes more trades in a given year than the average of comparable funds.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VSMIX is a no load fund. It has an expense ratio of 0.84% compared to the category average of 1.22%. VSMIX 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 $1,000 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, Invesco Small Cap Value Y ( VSMIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on VSMIXin the Mutual Fund Equity Report 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. 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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