Technology

Is Conestoga Small Cap Investors (CCASX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Small Cap Blend fund? Starting with Conestoga Small Cap Investors (CCASX) is one possibility. CCASX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes CCASX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.

History of Fund/Manager

CCASX finds itself in the Conestoga family, based out of Radnor, PA. Conestoga Small Cap Investors made its debut in October of 2004, and since then, CCASX has accumulated about $851 million in assets, per the most up-to-date date available. The fund is currently managed by Robert Mitchell who has been in charge of the fund since October of 2004.

Performance

Investors naturally seek funds with strong performance. CCASX has a 5-year annualized total return of 12.8% and is in the top 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 18.83%, 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. Compared to the category average of 13.41%, the standard deviation of CCASX over the past three years is 16.44%. Over the past 5 years, the standard deviation of the fund is 15.58% compared to the category average of 12.89%. 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. CCASX lost 42.31% in the most recent bear market and outperformed its peer group by 11%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 1.05, so investors should note that it is hypothetically more volatile than the market at large. 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. CCASX's 5-year performance has produced a positive alpha of 1.9, which means 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 principally on equities that are traded in the United States.

Currently, this mutual fund is holding 91.3% stock in stocks, which have an average market capitalization of $3.02 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Industrial Cyclical
  3. Services
  4. Other

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, CCASX is a no load fund. It has an expense ratio of 1.10% compared to the category average of 1.11%. Looking at the fund from a cost perspective, CCASX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Conestoga Small Cap Investors ( CCASX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on CCASXin the Small Cap Blend 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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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.

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