If investors are looking at the Small Cap Growth fund category, Federated MDT Small Cap Growth Fund A (QASGX Quick QuoteQASGX - Free Report) could be a potential option. QASGX bears a Zacks Mutual Fund Rank of 1 (Strong 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 QASGX. 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

QASGX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. Federated MDT Small Cap Growth Fund A made its debut in September of 2005, and since then, QASGX has accumulated about $73.60 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.61%, 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 1.9%, 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. QASGX's standard deviation over the past three years is 22.96% compared to the category average of 16.06%. The fund's standard deviation over the past 5 years is 24.88% compared to the category average of 17.59%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.22, so investors should note that it is hypothetically more volatile than the market at large. 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. QASGX's 5-year performance has produced a negative alpha of -7.83, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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 primarily on equities that are traded in the United States.

Right now, 81.52% of this mutual fund's holdings are stocks, with an average market capitalization of $4.21 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Health
• Finance
• Other
• Industrial Cyclical

With turnover at about 90%, this fund makes more traders than comparable funds in a given year.

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, QASGX is a load fund. It has an expense ratio of 1.13% compared to the category average of 1.01%. So, QASGX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment needs to be at least $100.

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

Bottom Line

Overall, even with its comparatively similar performance, worse downside risk, and higher fees, Federated MDT Small Cap Growth Fund A ( QASGX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

For additional information on the Small Cap Growth 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 QASGX too 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.