Is Harbor Capital Appreciation Institutional (HACAX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Large Cap Growth funds, a place to start could be Harbor Capital Appreciation Institutional (HACAX). HACAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

HACAX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

HACAX finds itself in the Harbor Funds family, based out of Chicago, IL. Since Harbor Capital Appreciation Institutional made its debut in December of 1987, HACAX has garnered more than $25.58 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 25.33%, 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 23.51%, which places it in the top 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. HACAX’s standard deviation over the past three years is 22% compared to the category average of 16.21%. The fund’s standard deviation over the past 5 years is 18.2% compared to the category average of 13.48%. 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 1.11, 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 positive alpha over the past 5 years of 6.15, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, HACAX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.03%. So, HACAX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $50,000, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Harbor Capital Appreciation Institutional ( HACAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Harbor Capital Appreciation Institutional ( HACAX ) looks like a good potential choice for investors right now.

Your research on the Large Cap Growth segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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