If you've been stuck searching for Small Cap Growth funds, consider Principal Small Cap Growth I Institutional (PGRTX Quick QuotePGRTX - Free Report) as a possibility. PGRTX bears 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

PGRTX finds itself in the Principal Financial Group family, based out of Des Moines, IA. The Principal Small Cap Growth I Institutional made its debut in September of 2002 and PGRTX has managed to accumulate roughly $94.44 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.7%, 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 14.84%, 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. Compared to the category average of 13.53%, the standard deviation of PGRTX over the past three years is 19.76%. Looking at the past 5 years, the fund's standard deviation is 20.66% compared to the category average of 14.86%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.12, the fund is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -9.2, 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 principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 84.27% of its assets in stocks, and these companies have an average market capitalization of $7.75 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Health
• Industrial Cyclical
• Other

Turnover is 67%, which means, on average, the fund makes fewer trades than the average comparable fund.

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, PGRTX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 0.99%. PGRTX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. 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.

Your research on the Small Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.