Is MassMutual Select Small Cap Growth Equity I (MSGZX) a Strong Mutual Fund Pick Right Now?
If you’ve been stuck searching for Small Cap Growth funds, consider MassMutual Select Small Cap Growth Equity I (MSGZX) as a possibility. MSGZX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
MSGZX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with market caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
MassMutual is based in Springfield, MA, and is the manager of MSGZX. The MassMutual Select Small Cap Growth Equity I made its debut in November of 2010 and MSGZX has managed to accumulate roughly $391.10 million in assets, as of the most recently available information. The fund’s current manager is a team of investment professionals.
Investors naturally seek funds with strong performance. MSGZX has a 5-year annualized total return of 3.98%, and it sits in the middle 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 13.99%, which places it in the top third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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 17.84% compared to the category average of 11.6%. The fund’s standard deviation over the past 5 years is 19.17% compared to the category average of 13.57%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.1, so it is likely going to be more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -7.52. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, MSGZX is a no load fund. It has an expense ratio of 0.88% compared to the category average of 0.96%. From a cost perspective, MSGZX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, MassMutual Select Small Cap Growth Equity I ( MSGZX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, MassMutual Select Small Cap Growth Equity I ( MSGZX ) looks like a good potential choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).