Large Cap Growth fund seekers should not consider taking a look at Harbor Capital Appreciation Institutional (HACAX - Free Report) at this time. HACAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
HACAX 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
Harbor Funds is based in Chicago, IL, and is the manager of HACAX. Since Harbor Capital Appreciation Institutional made its debut in December of 1987, HACAX has garnered more than $22.37 billion in assets. Spiros Sig Segalas is the fund's current manager and has held that role since May of 1990.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.24%, and it sits 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 20.07%, 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. The standard deviation of HACAX over the past three years is 14.05% compared to the category average of 10.08%. Over the past 5 years, the standard deviation of the fund is 14.17% compared to the category average of 9.93%. This makes the fund more volatile than its peers over the past half-decade.
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 HACAX's case, the fund lost 43.96% in the most recent bear market and outperformed its peer group by 4.89%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. HACAX 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. With a positive alpha of 0.68, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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.
Currently, this mutual fund is holding 97.71% stock in stocks, with an average market capitalization of $294.71 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
Turnover is 40%, which means, on average, the fund makes fewer trades than comparable funds.
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, HACAX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 1.05%. So, HACAX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $50,000, investors should also note that there is no minimum for each subsequent investment.
Overall, Harbor Capital Appreciation Institutional ( HACAX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
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