Is Columbia Small Cap Growth I Inst3 (CSGYX) A Strong Mutual Fund Pick Right Now?

Small Cap Growth fund seekers should consider taking a look at Columbia Small Cap Growth I Inst3 CSGYX. CSGYX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Small Cap Growth funds is an area filled with options, such as CSGYX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.

History of Fund/Manager

Columbia is based in Boston, MA, and is the manager of CSGYX. The Columbia Small Cap Growth I Inst3 made its debut in July of 2009 and CSGYX has managed to accumulate roughly $56.93 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. CSGYX has a 5-year annualized total return of 15.13% 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 15.77%, 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 9.32%, the standard deviation of CSGYX over the past three years is 13.62%. The fund's standard deviation over the past 5 years is 14.51% compared to the category average of 13.81%. 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.

Investors should note that the fund has a 5-year beta of 1.12, so it is likely going to be more volatile than 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. The fund has produced a negative alpha over the past 5 years of -1.14, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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 largely on equities that are traded in the United States.

The mutual fund currently has 97.64% of its holdings in stocks, and these companies have an average market capitalization of $3.41 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology
2. Other
3. Industrial Cyclical
4. Retail Trade
5. Finance
6. Services

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, CSGYX is a no load fund. It has an expense ratio of 0.93% compared to the category average of 1.36%. CSGYX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

Overall, Columbia Small Cap Growth I Inst3 CSGYX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about CSGYX? 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.