Next WylieMoney Slowly Category: Small Growth

The first down day in March (Damn you leap year! That should have been Friday!), I'll put $2500 hypothetical dollars in a Small Growth fund in the WylieMoney Slowly portfolio.

My original pick for the WylieMoney Portfolio was BGRFX Baron Growth fund My Post. So is this still the best no-load, no-fee option with a $2500 or lower initial and $100 subsequent investment minimums and lower than its peers turnover and expenses?

At first glance, maybe not:

Baron Growth has the best performance over the longest time frame but over the last three years and even five years there are a number of funds that have performed slightly better. But Baron Growth is the only fund with 5 stars:

The Forward Hoover Small Cap Equity fund FFSCX requires $4000 initialy, so I rule it out. TCW Small Cap Growth TGSNX has high expenses and a short track record. Since there are several options with lower expenses, I rule it out.

So I pick 5 of the remaining top performers and lok at some of the details. The best performing over 3 years, Neuberger Berman Small Growth NBMOX has really high turnover in addition to the highest fees of the bunch (see above). Marshall Small Cap Growth MRSCX also has high turnover so either of these would be less than ideal for a taxable account.

Value Line Emerging Opportunities VLEOX has low turnover, small total assets which is good for a small cap fund and has a smaller percentage of total assets in its top ten investments. When looking at recent performance however, Baron Growth looks like the safer bet. Over the last 1 month and 3 month periods, Baron Growth has survived recent sell offs better than the competition.

And that is why Morningstar gives it 5 stars instead of the 4 stars given to Value Line Emerging Opportunities. Baron Growth has earned slightly less than the other funds but has done so with substantially less risk.

Either fund would be a decent choice, but I will stick with the Baron Growth fund.

No comments: