Yahoo Finance Is Principal Small Cap Growth I Institutional (PGRTX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mutual Fund Equity Report fund category, Principal Small Cap Growth I Institutional (PGRTX) could be a potential option. PGRTX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PGRTX finds itself in the Principal Financial Group family, based out of Des Moines, IA. The Principal Small Cap Growth I Institutional made its debut in September of 2002 and PGRTX has managed to accumulate roughly $141.74 million in assets, as of the most recently available information. Randy Welch is the fund's current manager and has held that role since June of 2009.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.18%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.35%, which places it in the bottom 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. Over the past three years, PGRTX's standard deviation comes in at 21.16%, compared to the category average of 16.57%. The standard deviation of the fund over the past 5 years is 23.4% compared to the category average of 16.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.1, so investors should note that it is hypothetically 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 negative alpha of -3.96, managers in this portfolio find it difficult to pick 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 largely on equities that are traded in the United States.
Right now, 96.4% of this mutual fund's holdings are stocks, which have an average market capitalization of $5.27 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Health
Industrial Cyclical
Other
Turnover is about 50.7%, so those in charge of the fund make fewer trades than comparable funds.
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, PGRTX is a no load fund. It has an expense ratio of 0.94% compared to the category average of 1.19%. From a cost perspective, PGRTX is actually cheaper than its peers.
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, Principal Small Cap Growth I Institutional ( PGRTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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