Is Red Oak Technology Select (ROGSX) a Strong Mutual Fund Pick Right Now?
Sector – Tech fund seekers should consider taking a look at Red Oak Technology Select (ROGSX). ROGSX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that ROGSX is a Sector – Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector – Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
Oak Associates is based in Akron, OH, and is the manager of ROGSX. Red Oak Technology Select made its debut in December of 1998, and since then, ROGSX has accumulated about $658.37 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
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 16.52%, 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 8.16%, 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. Over the past three years, ROGSX’s standard deviation comes in at 21.92%, compared to the category average of 0%. The fund’s standard deviation over the past 5 years is 20.29% compared to the category average of 0%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. ROGSX has a 5-year beta of 1.05, 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. Over the past 5 years, the fund has a positive alpha of 0.22. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, ROGSX is a no load fund. It has an expense ratio of 0.91% compared to the category average of 30%. So, ROGSX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $25
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Red Oak Technology Select ( ROGSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Red Oak Technology Select ( ROGSX ) looks like a great potential choice for investors right now.
Your research on the Sector – Tech 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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