Is Motley Fool Great America Fund (TMFGX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Mid Cap Growth fund? Starting with Motley Fool Great America Fund (TMFGX) should not be a possibility at this time. TMFGX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
TMFGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
Motley Fool is based in Providence, RI, and is the manager of TMFGX. Motley Fool Great America Fund made its debut in November of 2010, and since then, TMFGX has accumulated about $240.10 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 12.66%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.97%, 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. TMFGX's standard deviation over the past three years is 21.05% compared to the category average of 17.71%. The fund's standard deviation over the past 5 years is 17.99% compared to the category average of 15.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.08, the fund is likely to be more volatile than the market average. 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. TMFGX has generated a positive alpha over the past five years of 0.59, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, TMFGX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1.20%. Looking at the fund from a cost perspective, TMFGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $500 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Motley Fool Great America Fund ( TMFGX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Motley Fool Great America Fund ( TMFGX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mid Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TMFGX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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 (TMFGX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
