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4 Top-Ranked Mid-Cap Growth Mutual Funds

Mid-cap funds are ideal investment options for investors looking for high return potential that comes with lower risk than small-cap funds. Mid-cap funds are not very susceptible to volatility in broader markets, making it an ideal bet given that the macroeconomic conditions have generally offered a roller-coaster ride in recent years. Meanwhile, when capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes. Below we share with you 4 top-rated, mid-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy), and we expect the fund to outperform its peers in the future. T. Rowe Price Mid-Cap Growth (MUTF: RPMGX ) maintains a diversified portfolio by investing a large chunk of its assets in companies having market capitalizations similar to those listed in the S&P MidCap 400 Index or the Russell Midcap Growth Index. RPMGX invests in companies having above-average growth potential. Though RPMGX focuses on acquiring common stocks of domestic companies, RPMGX may also invest in companies located outside the U.S. The T. Rowe Price Mid-Cap Growth fund has a three-year annualized return of 17.8%. Brian W.H. Berghuis is the fund manager of RPMGX since 1992. Principal MidCap A (MUTF: PEMGX ) seeks capital appreciation over the long run. PEMGX invests a lion’s share of its assets in equity securities of companies with medium size market capitalizations. Though PEMGX invests in both value and growth stocks of companies, PEMGX currently emphasizes on growth stocks. The Principal MidCap A fund has a three-year annualized return of 14.4%. As of November 2015, PEMGX held 94 issues with 4.46% of its assets invested in Brookfield Asset Management Inc. Class A. DF Dent Midcap Growth (MUTF: DFDMX ) invests majority of its assets in equity securities including common and preferred stocks of mid-cap firms. DFDMX primarily focuses on acquiring securities of companies listed in the U.S. market. DFDMX may also invest in ADRs, ETFs and REITs. The Principal MidCap A is a non-diversified fund and has a three-year annualized return of 13.5%. DFDMX has an expense ratio of 1.10% as compared to the category average of 1.28%. Vanguard Mid-Cap Growth Investor (MUTF: VMGRX ) seeks long-term capital growth. VMGRX invests a major portion of its assets in the securities of mid-cap companies. VMGRX primarily emphasizes acquiring common stocks of companies having above-average growth potential. The Vanguard Mid-Cap Growth Investor fund has a three-year annualized return of 14%. As of September 2015, VMGRX held 100 issues with 2.83% of its assets invested in Old Dominion Freight Line, Inc. (NASDAQ: ODFL ). Original Post

ETF Deathwatch For December 2015: AccuShares Join The List

The quantity of ETFs and ETNs on Deathwatch jumped by 23 for December. There were 28 additions and only five removals. Of those coming off, three were the result of improved health, while the other two were closed, delisted, and liquidated. The net increase pushes the membership count to a 35-month high of 366, consisting of 266 ETFs and 100 ETNs. Heading up the new arrivals are the two AccuShares ETFs, which are now more than six months old, making them eligible for Deathwatch. These two ETFs attempt to track the spot price of the VIX Volatility Index and fail miserably at doing so. They are teeter-totter ETFs, constructed much like the ill-fated MacroShares. As such, they were doomed from the start. But AccuShares added new twists that made them even worse than MacroShares in my opinion. AccuShares introduced the concept of “Corrective Distributions” that try to keep the demand for “up” shares in balance with the “down” shares. However, these distributions were both numerous and large, quickly depleting their asset bases. To overcome this, the funds made distributions of offsetting shares two months in a row: The owners of AccuShares Spot CBOE VIX Up (NASDAQ: VXUP ) received a “Corrective Distribution” of one share of AccuShares Spot CBOE VIX Down (NASDAQ: VXDN ), and owners of VXDN received a share of VXUP. It is almost impossible to bet on the direction of the VIX when offsetting positions are forced into your account. So far, the VXUP has made per-share distributions of $44.67 plus two shares of VXDN . Owners of VXDN have received $15.12 and two shares of VXUP (it’s a vicious circle). Between all the distributions, reverse splits, and offsetting shares, performance is nearly impossible to determine, and they do not even attempt to do so on the website. These products need to close before anyone else gets hurt. Once again, the majority of the new names added to ETF Deathwatch this month carry the smart-beta label. This suggests the market is currently saturated with smart-beta products, and investors need time to understand and digest all that are currently available. Three of the new additions are China-oriented funds, indicating this is another group approaching saturation. From a quantity standpoint, Global X had the most products added this month with eight of its ETFs, including all four of its new “scientific beta” line, joining the list. The average asset level of products on ETF Deathwatch increased from $6.8 million to $6.9 million, and the quantity of products with less than $2 million held steady at 73. The average age increased from 48.0 to 48.2 months, and the number of products more than five years old surged from 114 to 130. Here is the Complete List of 366 Products on ETF Deathwatch for December 2015 compiled using the objective ETF Deathwatch Criteria . The 28 ETPs added to ETF Deathwatch for December: AccuShares Spot CBOE VIX Down Shares AccuShares Spot CBOE VIX Up Shares AdvisorShares Madrona Global Bond (NYSEARCA: FWDB ) Columbia Large Cap Growth (NYSEARCA: RPX ) DB Crude Oil Long ETN (NYSEARCA: OLO ) Deutsche X-trackers MSCI All China (NYSEARCA: CN ) EGShares India Small Cap (NYSEARCA: SCIN ) ELEMENTS Morningstar Wide Moat Focus ETN (NYSEARCA: WMW ) Elkhorn S&P 500 Capital Expenditures (NASDAQ: CAPX ) ETRACS S&P 500 Gold Hedged Index ETN (NYSEARCA: SPGH ) Global X JPMorgan Efficiente (NYSEARCA: EFFE ) Global X MSCI Pakistan ETF (NYSEARCA: PAK ) Global X NASDAQ China Technology (NASDAQ: QQQC ) Global X Scientific Beta Asia ex-Japan ETF (NYSEARCA: SCIX ) Global X Scientific Beta Europe ETF (NYSEARCA: SCID ) Global X Scientific Beta Japan ETF (NYSEARCA: SCIJ ) Global X Scientific Beta US ETF (NYSEARCA: SCIU ) Global X YieldCo Index ETF (NASDAQ: YLCO ) Guggenheim International Multi-Asset Income (NYSEARCA: HGI ) iPath Pure Beta Coffee ETN (NYSEARCA: CAFE ) iShares B – Ca Rated Corporate Bond (BATS: QLTC ) iShares FactorSelect MSCI USA (NYSEARCA: LRGF ) iShares Treasury Floating Rate Bond ETF (NYSEARCA: TFLO ) Market Vectors Gulf States (NYSEARCA: MES ) PowerShares China A-Share (NYSEARCA: CHNA ) PowerShares KBW Insurance (NYSEARCA: KBWI ) WisdomTree China ex-State-Owned Enterprises (NASDAQ: CXSE ) WisdomTree Japan Quality Dividend Growth (NYSEARCA: JDG ) The 3 ETPs removed from ETF Deathwatch due to improved health: Credit Suisse Long/Short Liquid Index (Net) ETN (NYSEARCA: CSLS ) First Trust Morningstar Managed Futures Strategy (NYSEARCA: FMF ) ProShares Managed Futures Strategy (NYSEARCA: FUTS ) The 2 ETPs removed from ETF Deathwatch due to delisting: EGShares Blue Chip ETF (NYSEARCA: BCHP ) EGShares Brazil Infrastructure (NYSEARCA: BRXX ) ETF Deathwatch Archives Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Exited Gencor For 57.33% Return

On December 2, 2015, we exited our position in Gencor ( GENC ) for a total return of 57.33%. This position was first established on October 5, 2011. We held this stock for 4 years to wait for the catalyst of increased funding for Federal highway projects (transportation bill), which finally seems to be taking shape. Our average cost was $7.1/share and selling price was $11.25/share. Today, the company sports a $116 million market capitalization, carries no debt and has $96 million in cash. If you buy the stock today, you are looking at $20 million to buy the whole business (net of cash), with a great prospect of increased revenues and profits, as the Federal dollars start flowing in the infrastructure projects (which are sorely needed in the U.S.). Whether this is worthwhile investment now or not is your decision; for us, we felt that the capital can be reused elsewhere in this environment. A value trap is a value trap, until it isn’t. It took us close to 4 years to get a 57% return. Was it worth it? Maybe not. I remember when we first invested in Gencor, the large amount of cash on the balance sheet was very attractive to me, and so it was for many other value investors. Over time though, many of these investors have quit the investment. It has been a frustrating experience, for sure, to watch the management do almost nothing with the cash – neither invest in new projects, nor return it back to the shareholders. I suspect a calculation of significant increase in working capital requirements, when the highway funding finally comes through, played a big role in the management’s decision to hold on to cash. Looking at the opportunity cost of this wait, it was probably not worth it. However, one cannot fault the management of being more optimistic of the U.S. Congress’ ability to pass genuinely needed infrastructure funding. If I were running the company, I would have done the same, and then roundly vilified in the investment community. This is where the interests of the investors and the managers diverge a little, which is unfortunate, as we investors need to consider the long-term strategy for the business as the primary driver of the management actions. Why would the management not return the cash to the shareholders and then when needed raise the funds in the debt markets, is a question I cannot answer. Coming back to the Value Trap question – For the first 3 years of the holding, it indeed looked like one. This year the stock has risen 35%, so for a value investor who decided to get in towards the end of last year would definitely not consider this stock as a value trap. It is all in your perspective.