Is Red Oak Technology Select (ROGSX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector – Tech category, but where should you start your research? Well, one fund that you should consider investigating is Red Oak Technology Select (ROGSX). ROGSX has 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 ROGSX 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
Oak Associates is responsible for ROGSX, and the company is based out of Akron, OH. Since Red Oak Technology Select made its debut in December of 1998, ROGSX has garnered more than $780.05 million in assets. The fund’s current manager, Robert Stimpson, has been in charge of the fund since January of 2019.
Performance
Investors naturally seek funds with strong performance. ROGSX has a 5-year annualized total return of 13.28%, and is 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 24.26%, 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 ROGSX over the past three years is 18.51% compared to the category average of 24.14%. The fund’s standard deviation over the past 5 years is 20.83% compared to the category average of 25.71%. This makes the fund less 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 1.23, 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. ROGSX’s 5-year performance has produced a negative alpha of -0.69, which means managers in this portfolio find it difficult to pick 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 0.89% compared to the category average of 1.21%. Looking at the fund from a cost perspective, ROGSX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $25.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Red Oak Technology Select ( ROGSX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector – Tech, make sure to go to www.zacks.com/funds/mutual-funds 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.
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This article originally published on Zacks Investment Research (zacks.com).