On the lookout for a Large Cap Growth fund? Starting with Marsico 21ST Century Fund (MXXIX) should not be a possibility at this time. MXXIX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify MXXIX 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
Marsico is responsible for MXXIX, and the company is based out of Denver, CO. The Marsico 21ST Century Fund made its debut in February of 2000 and MXXIX has managed to accumulate roughly $225.99 million in assets, as of the most recently available information. The fund's current manager, Brandon Geisler, has been in charge of the fund since October of 2011.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.17%, 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 9.14%, 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. The standard deviation of MXXIX over the past three years is 13.36% compared to the category average of 13.01%. Over the past 5 years, the standard deviation of the fund is 12.86% compared to the category average of 12.62%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. MXXIX lost 58.48% in the most recent bear market and underperformed comparable funds by 9.64%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. MXXIX has a 5-year beta of 1.01, which means it is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -1.07. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Investigating 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.
Currently, this mutual fund is holding 95.37% stock in stocks, and these companies have an average market capitalization of $23.71 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
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, MXXIX is a no load fund. It has an expense ratio of 1.21% compared to the category average of 1.05%. MXXIX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Overall, Marsico 21ST Century Fund ( MXXIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Marsico 21ST Century Fund ( MXXIX ) looks like a somewhat weak choice for investors right now.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds . There, you can see more about the ranking process, and dive even deeper into MXXIX too 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.