Yahoo Finance Is Baron Fifth Avenue Growth Retail (BFTHX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Growth fund? Baron Fifth Avenue Growth Retail (BFTHX) is a possible starting point. BFTHX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
BFTHX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Baron is based in New York, NY, and is the manager of BFTHX. Since Baron Fifth Avenue Growth Retail made its debut in May of 2004, BFTHX has garnered more than $127.30 million in assets. The fund's current manager, Alex Umansky, has been in charge of the fund since November of 2011.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. BFTHX has a 5-year annualized total return of 9.72% and it sits 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 -3.11%, which places it in the bottom 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. The standard deviation of BFTHX over the past three years is 28.89% compared to the category average of 16.55%. Over the past 5 years, the standard deviation of the fund is 26% compared to the category average of 17.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.16, so it is likely going to be 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. Over the past 5 years, the fund has a negative alpha of -5.87. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 principally on equities that are traded in the United States.
Right now, 75.92% of this mutual fund's holdings are stocks, which have an average market capitalization of $703.26 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is about 14.2%, so those in charge of the fund make fewer trades than the average comparable fund.
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, BFTHX is a no load fund. It has an expense ratio of 1% compared to the category average of 0.95%. BFTHX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, worse downside risk, and higher fees, Baron Fifth Avenue Growth Retail ( BFTHX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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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