Is BNY Mellon Tech Growth A (DTGRX) a Strong Mutual Fund Pick Right Now?
Sector – Tech fund seekers may want to consider taking a look at BNY Mellon Tech Growth A (DTGRX). DTGRX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Sector – Tech funds is an area filled with options, and DTGRX is one of them. Sector – Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
DTGRX finds itself in the BNY Mellon family, based out of New York, NY. BNY Mellon Tech Growth A debuted in October of 1997. Since then, DTGRX has accumulated assets of about $381.00 million, according to the most recently available information. The fund is currently managed by Robert Zeuthen who has been in charge of the fund since March of 2022.
Performance
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 7.17%, and is 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 24.88%, which places it in the middle 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. The standard deviation of DTGRX over the past three years is 21.08% compared to the category average of 13.57%. Looking at the past 5 years, the fund’s standard deviation is 24.74% compared to the category average of 15.97%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.41, 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. The fund has produced a negative alpha over the past 5 years of -6.27, which shows that managers in this portfolio find it difficult to pick 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 largely on equities that are traded in the United States.
This fund is currently holding about 83.98% in stocks, and these companies have an average market capitalization of $584.81 billion. The fund has the heaviest exposure to the following market sectors:
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Technology
This fund’s turnover is about 33.84%, so the fund managers are making fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DTGRX is a load fund. It has an expense ratio of 1.16% compared to the category average of 1.01%. From a cost perspective, DTGRX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, worse downside risk, and higher fees, BNY Mellon Tech Growth A ( DTGRX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).