Yahoo Finance Is Wasatch Micro Cap Fund (WMICX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Mutual Fund Equity Report fund? Well, Wasatch Micro Cap Fund (WMICX) would not be a good potential starting point right now. WMICX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Wasatch is based in Salt Lake City, UT, and is the manager of WMICX. The Wasatch Micro Cap Fund made its debut in June of 1995 and WMICX has managed to accumulate roughly $525.90 million in assets, as of the most recently available information. Kenneth Korngiebel is the fund's current manager and has held that role since July of 2017.
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 8.44%, and is in the top 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 6.07%, which places it in the bottom 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. Over the past three years, WMICX's standard deviation comes in at 25.69%, compared to the category average of 21.94%. The standard deviation of the fund over the past 5 years is 27.25% compared to the category average of 19.67%. 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 1.2, so it is likely going to be more volatile than the market at large. 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. With a negative alpha of -2.94, 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 primarily on equities that are traded in the United States.
This fund is currently holding about 89.85% stock in stocks, and these companies have an average market capitalization of $1.27 billion. The fund has the heaviest exposure to the following market sectors:
Industrial Cyclical
Technology
Health
With turnover at about 59%, this fund is making fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, WMICX is a no load fund. It has an expense ratio of 1.66% compared to the category average of 1.19%. WMICX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,000, and each subsequent investment should be at least $100.
Bottom Line
Overall, Wasatch Micro Cap Fund ( WMICX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Wasatch Micro Cap Fund ( WMICX ) looks like a poor potential choice for investors right now.
This could just be the start of your research on WMICXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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