Is Neuberger Berman Mid Cap Growth A (NMGAX) a Strong Mutual Fund Pick Right Now?

If you’re looking for a Mid Cap Growth fund category, then a potential option is Neuberger Berman Mid Cap Growth A (NMGAX). NMGAX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

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Objective

NMGAX 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

NMGAX is a part of the Neuberger family of funds, a company based out of New York, NY. Neuberger Berman Mid Cap Growth A made its debut in May of 1998, and since then, NMGAX has accumulated about $47.40 million in assets, per the most up-to-date date available. The fund’s current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 20.67%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 20.51%, 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 15.97%, the standard deviation of NMGAX over the past three years is 22.08%. Over the past 5 years, the standard deviation of the fund is 17.95% compared to the category average of 13.15%. 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 1.05, so it is likely going to be 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. Over the past 5 years, the fund has a positive alpha of 1.93. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, NMGAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 1.17%. NMGAX 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 $1,000; each subsequent investment needs to be at least $100.

Bottom Line

Overall, Neuberger Berman Mid Cap Growth A ( NMGAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Neuberger Berman Mid Cap Growth A ( NMGAX ) looks like a somewhat average choice for investors right now.

Your research on the Mid 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. 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.

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