Is Bridgeway Small Cap Growth N (BRSGX) a Strong Mutual Fund Pick Right Now?
Small Cap Growth fund seekers should not consider taking a look at Bridgeway Small Cap Growth N (BRSGX) at this time. BRSGX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
BRSGX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.
History of Fund/Manager
BRSGX finds itself in the Bridgeway family, based out of Houston, TX. Bridgeway Small Cap Growth N debuted in January of 2004. Since then, BRSGX has accumulated assets of about $32.66 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 13.92%, and it sits in the bottom 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 9.54%, which places it in the bottom third during this time-frame.
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 BRSGX over the past three years is 30.08% compared to the category average of 25.55%. The fund's standard deviation over the past 5 years is 24.53% compared to the category average of 20.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.44, so investors should note that it is hypothetically more volatile than the market at large. 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. BRSGX's 5-year performance has produced a negative alpha of -7.55, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 91.83% of its assets in stocks, with an average market capitalization of $2.93 billion. The fund has the heaviest exposure to the following market sectors:
Health
Technology
Industrial Cyclical
Retail Trade
Services
Turnover is 115%, which means, on average, the fund makes more trades in a given year than the category average.
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, BRSGX is a no load fund. It has an expense ratio of 0.94% compared to the category average of 1.21%. BRSGX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Bridgeway Small Cap Growth N ( BRSGX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Small Cap Growth 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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