Is Harbor Capital Appreciation Institutional (HACAX) a Strong Mutual Fund Pick Right Now?

Have you been searching for a Large Cap Growth fund? You might want to begin with Harbor Capital Appreciation Institutional (HACAX). HACAX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify HACAX 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

HACAX finds itself in the Harbor Funds family, based out of Chicago, IL. Since Harbor Capital Appreciation Institutional made its debut in December of 1987, HACAX has garnered more than $23.35 billion in assets. The fund is currently managed by Spiros Sig Segalas who has been in charge of the fund since May of 1990.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 12.59%, and it sits in the top 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 17.49%, 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 10.67%, the standard deviation of HACAX over the past three years is 14.82%. The fund's standard deviation over the past 5 years is 14.61% compared to the category average of 10.7%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In HACAX's case, the fund lost 43.95% in the most recent bear market and outperformed its peer group by 5%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 1.11, so investors should note that it is hypothetically more volatile than the market at large. 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. With a positive alpha of 1.55, managers in this portfolio are skilled in picking 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 mostly on equities that are traded in the United States.

This fund is currently holding about 89.21% stock in stocks, and these companies have an average market capitalization of $271.18 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology

2. Retail Trade

With turnover at about 40%, this fund is making fewer trades than its comparable peers.

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, HACAX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.08%. From a cost perspective, HACAX is actually cheaper than its peers.

This fund requires a minimum initial investment of $50,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Harbor Capital Appreciation Institutional ( HACAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Want even more information about HACAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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