Yahoo Finance Is BlackRock Advantage Small Cap Core A (BDSAX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Small Cap Blend fund? Starting with BlackRock Advantage Small Cap Core A (BDSAX) is one possibility. BDSAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify BDSAX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
BlackRock is responsible for BDSAX, and the company is based out of New York, NY. Since BlackRock Advantage Small Cap Core A made its debut in June of 2013, BDSAX has garnered more than $387.80 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 8.94%, and it sits in the middle 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 0.46%, 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. BDSAX's standard deviation over the past three years is 21.11% compared to the category average of 15.73%. The standard deviation of the fund over the past 5 years is 24.2% compared to the category average of 17.27%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.17, 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. BDSAX has generated a negative alpha over the past five years of -6.35, demonstrating that managers in this portfolio find it difficult to pick 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 92.8% of its holdings in stocks, with an average market capitalization of $3.20 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
With turnover at about 93%, this fund is making more traders than comparable funds in a given year.
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, BDSAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.97%. Looking at the fund from a cost perspective, BDSAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, BlackRock Advantage Small Cap Core A ( BDSAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, BlackRock Advantage Small Cap Core A ( BDSAX ) looks like a great potential choice for investors right now.
For additional information on the Small Cap Blend 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 BDSAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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