Having trouble finding a Mid Cap Growth fund? Well, Alger Mid Cap Growth Institutional Fund I (ALMRX) would not be a good potential starting point right now. ALMRX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
ALMRX 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.
History of Fund/Manager
ALMRX is a part of the Alger Funds family of funds, a company based out of New York, NY. Since Alger Mid Cap Growth Institutional Fund I made its debut in November of 1993, ALMRX has garnered more than $73.27 million in assets. Teresa McRoberts is the fund's current manager and has held that role since February of 2015.
Of course, investors look for strong performance in funds. ALMRX has a 5-year annualized total return of 7.61% 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 11.6%, which places it in the middle 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. Compared to the category average of 11.69%, the standard deviation of ALMRX over the past three years is 16.32%. Looking at the past 5 years, the fund's standard deviation is 15.49% compared to the category average of 11.37%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. ALMRX lost 63.45% in the most recent bear market and underperformed comparable funds by 12%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -1.51, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, ALMRX is a no load fund. It has an expense ratio of 1.35% compared to the category average of 1.20%. So, ALMRX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Overall, Alger Mid Cap Growth Institutional Fund I ( ALMRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Mid 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.