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Is Federated Kaufmann Small Cap C (FKCSX) 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 Federated Kaufmann Small Cap C (FKCSX - Free Report) . FKCSX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FKCSX 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
FKCSX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. Federated Kaufmann Small Cap C debuted in December of 2002. Since then, FKCSX has accumulated assets of about $200.42 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FKCSX has a 5-year annualized total return of 17.52% and is 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 25.13%, 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. FKCSX's standard deviation over the past three years is 15.41% compared to the category average of 10.73%. Looking at the past 5 years, the fund's standard deviation is 16.93% compared to the category average of 10.89%. 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 FKCSX's case, the fund lost 56.59% in the most recent bear market and underperformed comparable funds by 4%. This might suggest that the fund is a worse choice than its peers 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. FKCSX has a 5-year beta of 1.12, which means it is likely to be more volatile than the market average. 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. The fund has produced a positive alpha over the past 5 years of 5.03, which shows that managers in this portfolio are skilled in picking 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.
Right now, 90.7% of this mutual fund's holdings are stocks, which have an average market capitalization of $4.10 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Health
With turnover at about 36%, this fund makes 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, FKCSX is a no load fund. It has an expense ratio of 1.97% compared to the category average of 1.22%. So, FKCSX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, Federated Kaufmann Small Cap C ( FKCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Federated Kaufmann Small Cap C ( FKCSX ) 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. 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 C (FKCSX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Small Cap Growth funds, a place to start could be Federated Kaufmann Small Cap C (FKCSX - Free Report) . FKCSX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FKCSX 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
FKCSX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. Federated Kaufmann Small Cap C debuted in December of 2002. Since then, FKCSX has accumulated assets of about $200.42 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FKCSX has a 5-year annualized total return of 17.52% and is 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 25.13%, 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. FKCSX's standard deviation over the past three years is 15.41% compared to the category average of 10.73%. Looking at the past 5 years, the fund's standard deviation is 16.93% compared to the category average of 10.89%. 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 FKCSX's case, the fund lost 56.59% in the most recent bear market and underperformed comparable funds by 4%. This might suggest that the fund is a worse choice than its peers 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. FKCSX has a 5-year beta of 1.12, which means it is likely to be more volatile than the market average. 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. The fund has produced a positive alpha over the past 5 years of 5.03, which shows that managers in this portfolio are skilled in picking 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.
Right now, 90.7% of this mutual fund's holdings are stocks, which have an average market capitalization of $4.10 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Health
With turnover at about 36%, this fund makes 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, FKCSX is a no load fund. It has an expense ratio of 1.97% compared to the category average of 1.22%. So, FKCSX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, Federated Kaufmann Small Cap C ( FKCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Federated Kaufmann Small Cap C ( FKCSX ) 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. 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.