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Is State Farm Growth Fund (STFGX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is State Farm Growth Fund (STFGX - Free Report) . STFGX 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

STFGX finds itself in the State Farm family, based out of Bloomington, IL. State Farm Growth Fund made its debut in March of 1975, and since then, STFGX has accumulated about $6.35 billion 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. STFGX has a 5-year annualized total return of 10.47% and is in the middle 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 10.77%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 STFGX over the past three years is 17.21% compared to the category average of 17.84%. The standard deviation of the fund over the past 5 years is 17.33% compared to the category average of 18.87%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.9, which means it is hypothetically less 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. With a positive alpha of 0.27, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, STFGX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.76%. Looking at the fund from a cost perspective, STFGX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, State Farm Growth Fund ( STFGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, State Farm Growth Fund ( STFGX ) looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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.


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