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Is PGIM Jennison Mid-Cap Growth A (PEEAX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research
·4 min read

Having trouble finding a Mid Cap Growth fund? PGIM Jennison Mid-Cap Growth A (PEEAX) is a possible starting point. PEEAX bears 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 PEEAX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.

History of Fund/Manager

PGIM is responsible for PEEAX, and the company is based out of Providence, RI. PGIM Jennison Mid-Cap Growth A debuted in December of 1996. Since then, PEEAX has accumulated assets of about $925.12 million, according to the most recently available information. The fund is currently managed by Sheetal M. Prasad who has been in charge of the fund since January of 2017.

Performance

Investors naturally seek funds with strong performance. PEEAX has a 5-year annualized total return of 15.94% and is in the middle 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 19.44%, which places it in the middle 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, PEEAX's standard deviation comes in at 21.07%, compared to the category average of 15.54%. The fund's standard deviation over the past 5 years is 17.39% compared to the category average of 13.29%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.07, the fund is likely to be more volatile than 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. PEEAX has generated a positive alpha over the past five years of 1.14, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, PEEAX is a load fund. It has an expense ratio of 1.06% compared to the category average of 1.20%. From a cost perspective, PEEAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $100.

Bottom Line

Overall, PGIM Jennison Mid-Cap Growth A ( PEEAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Don't stop here for your research on Mid Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PEEAX to its peers 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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Zacks Investment Research