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Is MassMutual Select Small Cap Growth Equity R5 (MSGSX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Small Cap Growth funds, a place to start could be MassMutual Select Small Cap Growth Equity R5 (MSGSX - Free Report) . MSGSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as MSGSX. 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
MassMutual is based in Springfield, MA, and is the manager of MSGSX. Since MassMutual Select Small Cap Growth Equity R5 made its debut in May of 1999, MSGSX has garnered more than $115.96 million in assets. 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 14.36%, and is in the middle 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 16.17%, which places it in the middle 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. MSGSX's standard deviation over the past three years is 13.01% compared to the category average of 9.54%. Over the past 5 years, the standard deviation of the fund is 13.53% compared to the category average of 9.37%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. MSGSX lost 52.67% in the most recent bear market and underperformed its peer group by 0.47%. This could mean that the fund is a worse 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. MSGSX has a 5-year beta of 1.09, 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. MSGSX has generated a negative alpha over the past five years of -0.87, demonstrating that 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 93.72% of its assets in stocks, with an average market capitalization of $3.94 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Turnover is about 80%, so those in charge of the fund make more trades per year than the comparable average.
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, MSGSX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 1.31%. MSGSX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, MassMutual Select Small Cap Growth Equity R5 ( MSGSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is MassMutual Select Small Cap Growth Equity R5 (MSGSX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Small Cap Growth funds, a place to start could be MassMutual Select Small Cap Growth Equity R5 (MSGSX - Free Report) . MSGSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as MSGSX. 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
MassMutual is based in Springfield, MA, and is the manager of MSGSX. Since MassMutual Select Small Cap Growth Equity R5 made its debut in May of 1999, MSGSX has garnered more than $115.96 million in assets. 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 14.36%, and is in the middle 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 16.17%, which places it in the middle 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. MSGSX's standard deviation over the past three years is 13.01% compared to the category average of 9.54%. Over the past 5 years, the standard deviation of the fund is 13.53% compared to the category average of 9.37%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. MSGSX lost 52.67% in the most recent bear market and underperformed its peer group by 0.47%. This could mean that the fund is a worse 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. MSGSX has a 5-year beta of 1.09, 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. MSGSX has generated a negative alpha over the past five years of -0.87, demonstrating that 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 93.72% of its assets in stocks, with an average market capitalization of $3.94 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Industrial Cyclical
Turnover is about 80%, so those in charge of the fund make more trades per year than the comparable average.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, MSGSX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 1.31%. MSGSX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, MassMutual Select Small Cap Growth Equity R5 ( MSGSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.