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Is Federated Kaufmann Small Cap A (FKASX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Small Cap Growth fund category, Federated Kaufmann Small Cap A (FKASX - Free Report) could be a potential option. FKASX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FKASX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
FKASX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. Federated Kaufmann Small Cap A debuted in December of 2002. Since then, FKASX has accumulated assets of about $684.62 million, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 17.86%, and is in the top 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 24.67%, 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 9.71%, the standard deviation of FKASX over the past three years is 14.64%. Looking at the past 5 years, the fund's standard deviation is 15.34% compared to the category average of 9.54%. 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. In FKASX's case, the fund lost 56.25% in the most recent bear market and outperformed its peer group by 3.12%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.09, which means it is hypothetically 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. Over the past 5 years, the fund has a positive alpha of 3.08. This means 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.91% of its assets in stocks, with an average market capitalization of $3.62 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Health
With turnover at about 44%, this fund is making 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, FKASX is a load fund. It has an expense ratio of 1.35% compared to the category average of 1.31%. FKASX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Federated Kaufmann Small Cap A ( FKASX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on FKASXin the Small 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.
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Is Federated Kaufmann Small Cap A (FKASX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Small Cap Growth fund category, Federated Kaufmann Small Cap A (FKASX - Free Report) could be a potential option. FKASX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FKASX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
FKASX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. Federated Kaufmann Small Cap A debuted in December of 2002. Since then, FKASX has accumulated assets of about $684.62 million, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 17.86%, and is in the top 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 24.67%, 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 9.71%, the standard deviation of FKASX over the past three years is 14.64%. Looking at the past 5 years, the fund's standard deviation is 15.34% compared to the category average of 9.54%. 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. In FKASX's case, the fund lost 56.25% in the most recent bear market and outperformed its peer group by 3.12%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.09, which means it is hypothetically 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. Over the past 5 years, the fund has a positive alpha of 3.08. This means 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.91% of its assets in stocks, with an average market capitalization of $3.62 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Health
With turnover at about 44%, this fund is making 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, FKASX is a load fund. It has an expense ratio of 1.35% compared to the category average of 1.31%. FKASX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Federated Kaufmann Small Cap A ( FKASX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on FKASXin the Small 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.