Having trouble finding a Small Cap Growth fund? ClearBridge Small Cap Growth A (SASMX) is a potential starting point. SASMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
SASMX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.
History of Fund/Manager
Legg Mason is based in Baltimore, MD, and is the manager of SASMX. Since ClearBridge Small Cap Growth A made its debut in August of 1999, SASMX has garnered more than $906 million in assets. Jeffrey J. Russell is the fund's current manager and has held that role since March of 2007.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 8.5%, 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 22.93%, 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. Over the past three years, SASMX's standard deviation comes in at 15.75%, compared to the category average of 10.1%. The fund's standard deviation over the past 5 years is 17.08% compared to the category average of 9.98%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, SASMX lost 50.48% and outperformed its peer group by 2.5%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 1.22, so investors should note that it is hypothetically more volatile than 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. SASMX's 5-year performance has produced a negative alpha of -3.25, which means 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, SASMX is a load fund. It has an expense ratio of 1.19% compared to the category average of 1.25%. Looking at the fund from a cost perspective, SASMX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, ClearBridge Small Cap Growth A ( SASMX ) has a high Zacks Mutual Fund rank, strong performance, worse downside risk, and lower fees compared to its peers.
Your research on the Small Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.
Get Your Free (SASMX): Fund Analysis Report
Original post