Is Akre Focus Retail (AKREX) A Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Mid Cap Growth funds, you might want to consider passing on by Akre Focus Retail AKREX as a possibility. AKREX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that AKREX 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

Akre is responsible for AKREX, and the company is based out of Middleburg, VA. The Akre Focus Retail made its debut in August of 2009 and AKREX has managed to accumulate roughly $3.66 billion in assets, as of the most recently available information. The fund's current manager, a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 17.35%, and is 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 13.16%, 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. Compared to the category average of 9.57%, the standard deviation of AKREX over the past three years is 10.37%. Looking at the past 5 years, the fund's standard deviation is 10.28% compared to the category average of 11.46%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.

Investors should note that the fund has a 5-year beta of 0.97, so it is likely going to be as volatile as 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. AKREX's 5-year performance has produced a positive alpha of 1.9, which means managers in this portfolio are skilled in picking 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, AKREX is a no load fund. It has an expense ratio of 1.33% compared to the category average of 1.20%. Looking at the fund from a cost perspective, AKREX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $250.

Bottom Line

Overall, Akre Focus Retail has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Akre Focus Retail looks like a poor potential 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 AKREX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.