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Is Baron Fifth Avenue Growth Retail (BFTHX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Large Cap Growth fund category, a potential starting could be Baron Fifth Avenue Growth Retail (BFTHX). BFTHX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify BFTHX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.

History of Fund/Manager

Baron is responsible for BFTHX, and the company is based out of New York, NY. Since Baron Fifth Avenue Growth Retail made its debut in May of 2004, BFTHX has garnered more than $109.70 million in assets. Alex Umansky is the fund's current manager and has held that role since November of 2011.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 13.3%, and is in the top 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 14.28%, which places it in the top 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. BFTHX's standard deviation over the past three years is 14.44% compared to the category average of 10.13%. Over the past 5 years, the standard deviation of the fund is 14.31% compared to the category average of 10.25%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. BFTHX lost 51.16% in the most recent bear market and underperformed comparable funds by 2.38%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 1.18, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. BFTHX has generated a positive alpha over the past five years of 0.4, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Exploring 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 largely on equities that are traded in the United States.

Currently, this mutual fund is holding 95.4% stock in stocks, which have an average market capitalization of $325.43 billion. Turnover is 13.48%, which means this fund makes fewer trades than the average comparable fund.

Expenses

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, BFTHX is a no load fund. It has an expense ratio of 1.02% compared to the category average of 1.10%. Looking at the fund from a cost perspective, BFTHX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Baron Fifth Avenue Growth Retail ( BFTHX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

This could just be the start of your research on BFTHXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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