If investors are looking at the Large Cap Growth fund category, make sure to pass over ClearBridge Aggressive Growth A (SHRAX). SHRAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify SHRAX 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
SHRAX finds itself in the Legg Mason family, based out of Baltimore, MD. The ClearBridge Aggressive Growth A made its debut in October of 1983 and SHRAX has managed to accumulate roughly $5.23 billion in assets, as of the most recently available information. The fund is currently managed by Richard A. Freeman who has been in charge of the fund since October of 1983.
Performance
Of course, investors look for strong performance in funds. SHRAX has a 5-year annualized total return of 9.76% and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.78%, 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. Over the past three years, SHRAX's standard deviation comes in at 12.52%, compared to the category average of 9.23%. Looking at the past 5 years, the fund's standard deviation is 12.05% compared to the category average of 8.97%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, SHRAX lost 51.89% and outperformed its peer group by 2.92%. This might suggest that the fund is a better choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 1.09, so investors should note that it is hypothetically 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 -4.54, which shows that 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, SHRAX is a load fund. It has an expense ratio of 1.12% compared to the category average of 1.10%. Looking at the fund from a cost perspective, SHRAX is actually more expensive than its peers.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.
Bottom Line
Overall, ClearBridge Aggressive Growth A ( SHRAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, ClearBridge Aggressive Growth A ( SHRAX ) looks like a somewhat weak choice for investors right now.
Your research on the Large 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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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.
