Is Mairs & Power Growth Fund (MPGFX) A Strong Mutual Fund Pick Right Now?
Zacks Investment Research | Dec 04, 2018 07:00AM ET
On the lookout for a Large Cap Blend fund? Starting with Mairs & Power Growth Fund (MPGFX) is one possibility. MPGFX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
MPGFX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Mairs & Power is responsible for MPGFX, and the company is based out of St. Paul, MN. Mairs & Power Growth Fund debuted in November of 1958. Since then, MPGFX has accumulated assets of about $4.27 billion, according to the most recently available information. The fund is currently managed by Mark L. Henneman who has been in charge of the fund since January of 2006.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 8.3%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.07%, 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. Over the past three years, MPGFX's standard deviation comes in at 9.81%, compared to the category average of 10.05%. Over the past 5 years, the standard deviation of the fund is 10.44% compared to the category average of 10.52%. This makes the fund less 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 MPGFX's case, the fund lost 44.89% in the most recent bear market and outperformed its peer group by 4.71%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. MPGFX has a 5-year beta of 0.97, which means it is likely to be as volatile as the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -2.33, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MPGFX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.98%. MPGFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, Mairs & Power Growth Fund ( MPGFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Don't stop here for your research on Large Cap Blend 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 Zacks Investment Research
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