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Is ClearBridge Small Cap Growth A (SASMX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research
·4-min read

There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is ClearBridge Small Cap Growth A (SASMX). SASMX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Franklin is based in San Mateo, CA, and is the manager of SASMX. ClearBridge Small Cap Growth A made its debut in August of 1999, and since then, SASMX has accumulated about $916 million in assets, per the most up-to-date date available. The fund's current manager, Jeffrey J. Russell, has been in charge of the fund since March of 2007.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.47%, 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 6.47%, which places it in the middle third during this time-frame.

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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. Compared to the category average of 17.08%, the standard deviation of SASMX over the past three years is 26%. The standard deviation of the fund over the past 5 years is 23.24% compared to the category average of 15.21%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.16, so investors should note that it is hypothetically 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. SASMX has generated a negative alpha over the past five years of -1.97, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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 98.21% stock in stocks, with an average market capitalization of $5.13 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Health

  3. Industrial Cyclical

Turnover is about 10%, so those in charge of the fund make fewer trades than comparable funds.

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, SASMX is a load fund. It has an expense ratio of 1.18% compared to the category average of 1.20%. From a cost perspective, SASMX is actually cheaper than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, ClearBridge Small Cap Growth A ( SASMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, ClearBridge Small Cap Growth A ( SASMX ) looks like a somewhat weak choice for investors right now.

Want even more information about SASMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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Zacks Investment Research