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Is Principal Small Cap Growth I Institutional (PGRTX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Small Cap Growth fund category, Principal Small Cap Growth I Institutional (PGRTX - Free Report) could be a potential option. PGRTX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as PGRTX. 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
Principal Financial Group is responsible for PGRTX, and the company is based out of Des Moines, IA. Principal Small Cap Growth I Institutional debuted in September of 2002. Since then, PGRTX has accumulated assets of about $114.24 million, according to the most recently available information. Randy Welch is the fund's current manager and has held that role since June of 2009.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.04%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -5.99%, which places it in the middle 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. PGRTX's standard deviation over the past three years is 21.39% compared to the category average of 15.32%. The fund's standard deviation over the past 5 years is 23.08% compared to the category average of 16.44%. 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. PGRTX has a 5-year beta of 1.09, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -6.56. This means that 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 principally on equities that are traded in the United States.
The mutual fund currently has 83.61% of its holdings in stocks, which have an average market capitalization of $6.32 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Health
Other
With turnover at about 50.3%, this fund makes fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PGRTX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 0.99%. So, PGRTX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Principal Small Cap Growth I Institutional ( PGRTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Principal Small Cap Growth I Institutional (PGRTX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Small Cap Growth fund category, Principal Small Cap Growth I Institutional (PGRTX - Free Report) could be a potential option. PGRTX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as PGRTX. 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
Principal Financial Group is responsible for PGRTX, and the company is based out of Des Moines, IA. Principal Small Cap Growth I Institutional debuted in September of 2002. Since then, PGRTX has accumulated assets of about $114.24 million, according to the most recently available information. Randy Welch is the fund's current manager and has held that role since June of 2009.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.04%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -5.99%, which places it in the middle 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. PGRTX's standard deviation over the past three years is 21.39% compared to the category average of 15.32%. The fund's standard deviation over the past 5 years is 23.08% compared to the category average of 16.44%. 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. PGRTX has a 5-year beta of 1.09, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -6.56. This means that 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 principally on equities that are traded in the United States.
The mutual fund currently has 83.61% of its holdings in stocks, which have an average market capitalization of $6.32 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
- Health
- Other
With turnover at about 50.3%, this fund makes fewer trades than the average comparable fund.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PGRTX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 0.99%. So, PGRTX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Principal Small Cap Growth I Institutional ( PGRTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.