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Is Eagle Mid Cap Growth A (HAGAX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Mid Cap Growth fund could think about starting with Eagle Mid Cap Growth A (HAGAX - Free Report) . HAGAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that HAGAX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.

History of Fund/Manager

Eagle Funds is responsible for HAGAX, and the company is based out of St. Petersburg, FL. The Eagle Mid Cap Growth A made its debut in August of 1998 and HAGAX has managed to accumulate roughly $498.03 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.48%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.25%, which places it in the top third during this time-frame.

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 9.09%, the standard deviation of HAGAX over the past three years is 12.61%. Over the past 5 years, the standard deviation of the fund is 11.86% compared to the category average of 11.46%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In HAGAX's case, the fund lost 46.9% in the most recent bear market and outperformed its peer group by 4.22%. This could mean that the fund is a better choice than comparable funds during a bear market.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. HAGAX has a 5-year beta of 1.11, which means it 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. The fund has produced a negative alpha over the past 5 years of -0.87, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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, 82.88% of this mutual fund's holdings are stocks, which have an average market capitalization of $19.88 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Non-Durable
  3. Industrial Cyclical
  4. Health

With turnover at about 44%, this fund is making fewer trades than comparable funds.

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, HAGAX is a load fund. It has an expense ratio of 1.12% compared to the category average of 1.20%. Looking at the fund from a cost perspective, HAGAX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, Eagle Mid Cap Growth A has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.




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