If you have been looking for Large Cap Growth funds, it would not be wise to start your search with Edgewood Growth Fund Institutional (EGFIX). EGFIX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify EGFIX 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
Edgewood is based in Kansas City, MO, and is the manager of EGFIX. Edgewood Growth Fund Institutional made its debut in March of 2006, and since then, EGFIX has accumulated about $14.31 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 16.41%, 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 22.76%, 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. Over the past three years, EGFIX's standard deviation comes in at 13.26%, compared to the category average of 11.56%. The fund's standard deviation over the past 5 years is 13.79% compared to the category average of 11.62%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, EGFIX lost 46.7% and outperformed its peer group by 2%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. EGFIX has a 5-year beta of 1.03, which means it is likely to be as volatile as the market average. 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. The fund has produced a positive alpha over the past 5 years of 4.21, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, EGFIX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.06%. Looking at the fund from a cost perspective, EGFIX is actually cheaper than its peers.
This fund requires a minimum initial investment of $100,000, while there is no minimum for each subsequent investment.
Overall, Edgewood Growth Fund Institutional ( EGFIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat weak 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. 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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