Is Edgewood Growth Fund Retail (EGFFX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Large Cap Growth fund might consider looking past Edgewood Growth Fund Retail (EGFFX). EGFFX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

EGFFX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.

History of Fund/Manager

Edgewood is based in Kansas City, MO, and is the manager of EGFFX. Edgewood Growth Fund Retail debuted in March of 2006. Since then, EGFFX has accumulated assets of about $455.30 million, according to the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. EGFFX has a 5-year annualized total return of 9.31% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.47%, which places it in the bottom third during this time-frame.

Invest in Gold

Priority Gold: Up to $15k in Free Silver + Zero Account Fees on Qualifying Purchase

Learn More

American Hartford Gold: #1 Precious Metals Dealer in the Nation

Learn More

Thor Metals Group: Best Overall Gold IRA

Learn More Powered by Money.com - Yahoo may earn commission from the links above.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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, EGFFX's standard deviation comes in at 21.64%, compared to the category average of 16.7%. The standard deviation of the fund over the past 5 years is 21.64% compared to the category average of 16.77%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.21, which means it is hypothetically 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 -7.41, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Story continues

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, EGFFX is a no load fund. It has an expense ratio of 1.40% compared to the category average of 0.94%. So, EGFFX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Edgewood Growth Fund Retail ( EGFFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Get Your Free (EGFFX): Fund Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research