Is Kinetics Small Cap Opportunity Adviser A (KSOAX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Global - Equity funds, consider Kinetics Small Cap Opportunity Adviser A (KSOAX) as a possibility. KSOAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

KSOAX is classified in the Global - Equity segment by Zacks, an area full of possibilities. Even though Global - Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren't limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.

History of Fund/Manager

KSOAX finds itself in the Kinetics family, based out of Sleepy Hollow, NY. Since Kinetics Small Cap Opportunity Adviser A made its debut in February of 2003, KSOAX has garnered more than $13.95 million in assets. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. KSOAX has a 5-year annualized total return of 8.91% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.06%, 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. The standard deviation of KSOAX over the past three years is 12.52% compared to the category average of 9.06%. The standard deviation of the fund over the past 5 years is 13.53% compared to the category average of 9.23%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, KSOAX lost 67.22% and underperformed comparable funds by 14.64%. This might suggest that the fund is a worse choice than its peers during a bear market.

Nevertheless, with a 5-year beta of 0.98, the fund is likely to be as volatile as 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. The fund has produced a negative alpha over the past 5 years of -1.52, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, KSOAX is a load fund. It has an expense ratio of 1.89% compared to the category average of 1.19%. From a cost perspective, KSOAX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.

Bottom Line

Overall, Kinetics Small Cap Opportunity Adviser A ( KSOAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Kinetics Small Cap Opportunity Adviser A ( KSOAX ) looks like a good potential choice for investors right now.

This could just be the start of your research on KSOAXin the Global - Equity 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. 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Get Your Free (KSOAX): Fund Analysis Report
 
To read this article on Zacks.com click here.