U.S. Markets closed

Is Kinetics Small Cap Opportunity No Load (KSCOX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research
Blueprint Medicines (BPMC) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Having trouble finding a Global - Equity fund? Kinetics Small Cap Opportunity No Load (KSCOX) is a possible starting point. KSCOX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that KSCOX is a Global - Equity option, an investment area loaded with different options. While Global - Equity mutual funds invest their assets in large markets--think the U.S., Europe, and Japan--they aren't limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.

History of Fund/Manager

KSCOX is a part of the Kinetics family of funds, a company based out of Sleepy Hollow, NY. Kinetics Small Cap Opportunity No Load made its debut in February of 2003, and since then, KSCOX has accumulated about $164.65 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 5.08%, 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 16.34%, 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. KSCOX's standard deviation over the past three years is 13.94% compared to the category average of 9.72%. Over the past 5 years, the standard deviation of the fund is 14.42% compared to the category average of 9.65%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, KSCOX lost 67.05% and underperformed comparable funds by 14.48%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Investors should note that the fund has a 5-year beta of 0.92, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -2.07, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, KSCOX is a no load fund. It has an expense ratio of 1.64% compared to the category average of 1.16%. So, KSCOX is actually more expensive than its peers from a cost perspective.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Kinetics Small Cap Opportunity No Load ( KSCOX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.

For additional information on the Global - Equity 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 KSCOX 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.


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
 
To read this article on Zacks.com click here.
 
Zacks Investment Research