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Is Shelton Nasdaq-100 Index Direct (NASDX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Index category, but where should you start your research? Well, one fund that might be worth investigating is Shelton Nasdaq-100 Index Direct (NASDX). NASDX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

History of Fund/Manager

NASDX finds itself in the Shelton family, based out of San Francisco, CA. Shelton Nasdaq-100 Index Direct debuted in April of 2000. Since then, NASDX has accumulated assets of about $585.10 million, according to the most recently available information. The fund's current manager, Stephen C. Rogers, has been in charge of the fund since December of 2003.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 15.85%, 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 14.34%, 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 9.16%, the standard deviation of NASDX over the past three years is 12.65%. The standard deviation of the fund over the past 5 years is 13% compared to the category average of 9.41%. 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, NASDX lost 49.71% and outperformed its peer group by 3.15%. This might suggest that the fund is a better choice than its peers during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.16, which means 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. With a positive alpha of 2.72, 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 primarily on equities that are traded in the United States.

The mutual fund currently has 95.5% of its holdings in stocks, which have an average market capitalization of $342.20 billion. With turnover at about 2%, this fund is making fewer trades than comparable funds.

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, NASDX is a no load fund. It has an expense ratio of 0.24% compared to the category average of 0.85%. Looking at the fund from a cost perspective, NASDX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $100.

Bottom Line

This could just be the start of your research on NASDXin the Index 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 want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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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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