Is VALIC Company II Mid Cap Growth Fund (VAMGX) A Strong Mutual Fund Pick Right Now?

Any investors who are searching for Mid Cap Growth funds should take a look at VALIC Company II Mid Cap Growth Fund VAMGX. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

Objective

Zacks categorizes VAMGX 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

VALIC Funds is based in Houston, TX, and is the manager of VAMGX. VALIC Company II Mid Cap Growth Fund debuted in September of 2006. Since then, VAMGX has accumulated assets of about $133.99 million, according to the most recently available information. Philip W. Ruedi is the fund's current manager and has held that role since June of 2017.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.82%, Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.9%.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VAMGX lost 59.42% in the most recent bear market. This compares to a roughly 50.7% slump for the broad U.S. stock market, so VAMGX has underperformed the average in the last market downturn.

Even still, the fund has a 5-year beta of 1.09, 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. The fund has produced a negative alpha over the past 5 years of -3.61, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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 principally on equities that are traded in the United States.

Right now, 79.37% of this mutual fund's holdings are stocks, with an average market capitalization of $9.01 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology
2. Finance
3. Industrial Cyclical
4. Services

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, VAMGX is a no load fund and it has an expense ratio of 0.85%.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

This could just be the start of your research on VAMGX in the Mid Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.