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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Growth funds, you might want to consider passing on by Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) as a possibility. ALARX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ALARX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Alger Funds is responsible for ALARX, and the company is 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 $2.26 billion, according to the most recently available information. The fund's current manager, Patrick Kelly, has been in charge of the fund since September of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. ALARX has a 5-year annualized total return of 13.71% 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 15.95%, 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. The standard deviation of ALARX over the past three years is 13.01% compared to the category average of 10.15%. The standard deviation of the fund over the past 5 years is 13.09% compared to the category average of 10.44%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In ALARX's case, the fund lost 50.11% in the most recent bear market and underperformed comparable funds by 1.25%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 2.26, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 86.99% stock in stocks, with an average market capitalization of $332.93 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
Turnover is 64.77%, which means this fund makes more traders than comparable funds in a given year.
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, ALARX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1.06%. So, ALARX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare ALARX to its peers as well 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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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Growth funds, you might want to consider passing on by Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) as a possibility. ALARX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ALARX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Alger Funds is responsible for ALARX, and the company is 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 $2.26 billion, according to the most recently available information. The fund's current manager, Patrick Kelly, has been in charge of the fund since September of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. ALARX has a 5-year annualized total return of 13.71% 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 15.95%, 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. The standard deviation of ALARX over the past three years is 13.01% compared to the category average of 10.15%. The standard deviation of the fund over the past 5 years is 13.09% compared to the category average of 10.44%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In ALARX's case, the fund lost 50.11% in the most recent bear market and underperformed comparable funds by 1.25%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 2.26, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 86.99% stock in stocks, with an average market capitalization of $332.93 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
Turnover is 64.77%, which means this fund makes more traders than comparable funds in a given year.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, ALARX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1.06%. So, ALARX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare ALARX to its peers as well 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.