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Is MassMutual Select Small Cap Growth Equity I (MSGZX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Small Cap Growth fund could think about starting with MassMutual Select Small Cap Growth Equity I (MSGZX - Free Report) . MSGZX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

MSGZX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.

History of Fund/Manager

MassMutual is based in Springfield, MA, and is the manager of MSGZX. MassMutual Select Small Cap Growth Equity I made its debut in November of 2010, and since then, MSGZX has accumulated about $331.50 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.82%, and it sits in the middle 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 18.65%, 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. MSGZX's standard deviation over the past three years is 12.22% compared to the category average of 9.54%. The fund's standard deviation over the past 5 years is 13.36% compared to the category average of 9.37%. 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.

Even still, the fund has a 5-year beta of 1.08, so investors should note that 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 negative alpha of -1.53. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MSGZX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.31%. Looking at the fund from a cost perspective, MSGZX is actually cheaper than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, MassMutual Select Small Cap Growth Equity I ( MSGZX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, MassMutual Select Small Cap Growth Equity I ( MSGZX ) looks like a good potential choice for investors right now.

Want even more information about MSGZX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.




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