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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Large Cap Growth fund? Starting with Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) is one possibility. ALARX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ALARX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
ALARX finds itself in the Alger Funds family, based out of New York, NY. Alger Capital Appreciation Institutional Fund I debuted in November of 1993. Since then, ALARX has accumulated assets of about $1.19 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 17.14%, 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 38.69%, which places it in the top 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 12.53%, the standard deviation of ALARX over the past three years is 20.59%. Over the past 5 years, the standard deviation of the fund is 22.38% compared to the category average of 14.61%. 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 1.31, so it is likely going to be 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. ALARX has generated a positive alpha over the past five years of 1.28, demonstrating that managers in this portfolio are skilled in picking 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.24% of its assets in stocks, with an average market capitalization of $826.69 billion. The fund has the heaviest exposure to the following market sectors:
Technology
With turnover at about 65.64%, this fund is making more trades in a given year than the average of 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, ALARX is a no load fund. It has an expense ratio of 1.20% compared to the category average of 0.94%. So, ALARX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that 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, even with its comparatively strong performance, worse downside risk, and higher fees, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
This could just be the start of your research on ALARX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
View the Zacks #1 Rank List
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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Growth fund? Starting with Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) is one possibility. ALARX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ALARX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
ALARX finds itself in the Alger Funds family, based out of New York, NY. Alger Capital Appreciation Institutional Fund I debuted in November of 1993. Since then, ALARX has accumulated assets of about $1.19 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 17.14%, 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 38.69%, which places it in the top 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 12.53%, the standard deviation of ALARX over the past three years is 20.59%. Over the past 5 years, the standard deviation of the fund is 22.38% compared to the category average of 14.61%. 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 1.31, so it is likely going to be 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. ALARX has generated a positive alpha over the past five years of 1.28, demonstrating that managers in this portfolio are skilled in picking 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.24% of its assets in stocks, with an average market capitalization of $826.69 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 65.64%, this fund is making more trades in a given year than the average of 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, ALARX is a no load fund. It has an expense ratio of 1.20% compared to the category average of 0.94%. So, ALARX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that 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, even with its comparatively strong performance, worse downside risk, and higher fees, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
This could just be the start of your research on ALARX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.