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 holds 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

Federated is based in Pittsburgh, PA, and is the manager of QASGX. Federated MDT Small Cap Growth Fund A made its debut in September of 2005, and since then, QASGX has accumulated about $80.99 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 10.12%, 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 13.89%, 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. Over the past three years, QASGX's standard deviation comes in at 21.57%, compared to the category average of 15.87%. Looking at the past 5 years, the fund's standard deviation is 21.82% compared to the category average of 15.45%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.15, the fund 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. With a negative alpha of -4.71, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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 1.00%. From a cost perspective, QASGX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $1,500 and that each subsequent investment needs to be at $100.

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

Bottom Line

Overall, even with its comparatively strong 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 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.