Small Cap Growth fund seekers should not consider taking a look at Wasatch Micro Cap Fund (WMICX Quick QuoteWMICX - Free Report) at this time. WMICX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

WMICX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with market caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.

History of Fund/Manager

WMICX finds itself in the Wasatch family, based out of Salt Lake City, UT. Since Wasatch Micro Cap Fund made its debut in June of 1995, WMICX has garnered more than $544.08 million in assets. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. WMICX has a 5-year annualized total return of -1.58%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 16.77%, 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 15.01%, the standard deviation of WMICX over the past three years is 22.04%. Looking at the past 5 years, the fund's standard deviation is 22.5% compared to the category average of 16.43%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.19, so it is likely going to be more volatile than the market at large. 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. WMICX has generated a negative alpha over the past five years of -13.51, demonstrating that 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, WMICX is a no load fund. It has an expense ratio of 1.64% compared to the category average of 1.05%. Looking at the fund from a cost perspective, WMICX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $100.

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

Bottom Line

Overall, Wasatch Micro Cap Fund ( WMICX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, Wasatch Micro Cap Fund ( WMICX ) looks like a somewhat weak 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 WMICX too 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.