Is Carillon Scout Mid Cap I (UMBMX) A Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Mid Cap Growth fund could think about starting with Carillon Scout Mid Cap I UMBMX. UMBMX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes UMBMX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts impressive sales and/or earnings growth.

History of Fund/Manager

UMBMX finds itself in the Scout Funds family, based out of Kansas City, MO. Carillon Scout Mid Cap I debuted in November of 2006. Since then, UMBMX has accumulated assets of about $1.58 billion, according to the most recently available information. 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 15.69%, 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 13.26%, 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 UMBMX over the past three years is 10.05% compared to the category average of 11.48%. Looking at the past 5 years, the fund's standard deviation is 10.66% compared to the category average of 11.45%. 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. UMBMX lost 46.04% in the most recent bear market and outperformed its peer group by 5.31%. This means that the fund could possibly be a better choice than its peers during a down market environment.

And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 35.1%, its worst calendar year in a decade.

Investors should note that the fund has a 5-year beta of 0.98, so it is likely going to be as volatile as the market at large. 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. With a positive alpha of 0.8, managers in this portfolio are skilled in picking 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.

The mutual fund currently has 99.40% of its holdings in stocks, which have an average market capitalization of $13.48 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology
2. Finance
3. Non-Durable
4. Industrial Cyclical

This fund's turnover is about 87%, so the fund managers are making more trades in a given year than the category average.

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, UMBMX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.22%. So, UMBMX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $100.

Bottom Line

Overall, Carillon Scout Mid Cap I UMBMX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on the Mid Cap Growth 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 UMBMX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.