Any investors hoping to find a Small Cap Growth fund might consider looking past Federated Hermes Kaufmann Small Cap A (FKASX). FKASX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
FKASX 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
FKASX finds itself in the Federated family, based out of Pittsburgh, PA. Federated Hermes Kaufmann Small Cap A debuted in December of 2002. Since then, FKASX has accumulated assets of about $635.75 million, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FKASX has a 5-year annualized total return of -0.76%, 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 11.92%, which places it in the bottom third during this time-frame.
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. Compared to the category average of 12.89%, the standard deviation of FKASX over the past three years is 18.81%. Over the past 5 years, the standard deviation of the fund is 20.32% compared to the category average of 14.48%. 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 1.08, 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. With a negative alpha of -12.01, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
