Is Hartford Growth Opportunities A (HGOAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mid Cap Growth fund might consider looking past Hartford Growth Opportunities A (HGOAX). HGOAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes HGOAX 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
Hartford is based in Woodbury, MN, and is the manager of HGOAX. Hartford Growth Opportunities A debuted in March of 1963. Since then, HGOAX has accumulated assets of about $2.07 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. HGOAX has a 5-year annualized total return of 12.67% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.25%, which places it in the middle 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 10.22%, the standard deviation of HGOAX over the past three years is 16.23%. The standard deviation of the fund over the past 5 years is 15.2% compared to the category average of 10.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, HGOAX lost 55.28% and underperformed comparable funds by 4%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.11, which means 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. HGOAX has generated a positive alpha over the past five years of 1.04, demonstrating that managers in this portfolio are skilled in picking 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 91.14% of its holdings in stocks, with an average market capitalization of $60.16 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Non-Durable
Other
Services
Turnover is 62%, which means, on average, the fund makes more trades in a given year than the average of comparable funds.
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, HGOAX is a load fund. It has an expense ratio of 1.11% compared to the category average of 1.22%. HGOAX 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 $2,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Hartford Growth Opportunities A ( HGOAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, Hartford Growth Opportunities A ( HGOAX ) looks like a somewhat weak choice for investors right now.
For additional information on the Mid Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into HGOAX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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