Is PGIM Jennison Mid-Cap Growth A (PEEAX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Mid Cap Growth fund? Starting with PGIM Jennison Mid-Cap Growth A (PEEAX) is one possibility. PEEAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
PEEAX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
PEEAX finds itself in the PGIM family, based out of Providence, RI. The PGIM Jennison Mid-Cap Growth A made its debut in December of 1996 and PEEAX has managed to accumulate roughly $687.24 million in assets, as of the most recently available information. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. PEEAX has a 5-year annualized total return of 7.12%, and is in the middle 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 11.28%, which places it in the bottom 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. Over the past three years, PEEAX’s standard deviation comes in at 18.07%, compared to the category average of 12.88%. The standard deviation of the fund over the past 5 years is 20.3% compared to the category average of 14.29%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. PEEAX has a 5-year beta of 1.17, which means it is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. PEEAX has generated a negative alpha over the past five years of -10.42, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PEEAX is a load fund. It has an expense ratio of 1.03% compared to the category average of 0.96%. From a cost perspective, PEEAX 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.
Overall, even with its comparatively similar performance, worse downside risk, and higher fees, PGIM Jennison Mid-Cap Growth A ( PEEAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
For additional information on the Mid Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PEEAX too for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (PEEAX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).