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There are plenty of choices in the Small Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Principal Small Cap Growth I Institutional (PGRTX). PGRTX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PGRTX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.
History of Fund/Manager
PGRTX finds itself in the Principal Financial Group family, based out of Des Moines, IA. Principal Small Cap Growth I Institutional debuted in September of 2002. Since then, PGRTX has accumulated assets of about $81.73 million, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.08%, and is in the bottom 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 2.99%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 15.77%, the standard deviation of PGRTX over the past three years is 20.99%. The standard deviation of the fund over the past 5 years is 21.11% compared to the category average of 16.97%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.11, the fund is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -7.97, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.