BSMAX
iShares Russell Small/MidCap IxFd-InvA
Introduction to BSMAX: A Smid Cap Focus
The iShares Russell Small/MidCap IxFd-InvA (BSMAX) is a mutual fund designed to track the performance of the small to mid-cap segment of the U.S. equity universe. It aims to replicate the investment results of the Russell 2500 Index, which is a benchmark for small to mid-cap stocks, often referred to as ‘smid cap’. Managed by BlackRock, this fund is categorized under small cap and is structured to provide both growth and income to its investors. With an expense ratio of 0.38%, BSMAX offers a cost-effective way to gain exposure to a diversified portfolio of U.S. equities, making it an attractive option for investors seeking to capitalize on the growth potential of smaller companies.
At A Glance
Executive Summary
BSMAX offers a competitive expense ratio of 0.38% and strong 1-year returns of 37.63%, focusing on small to mid-cap U.S. equities for growth and income.
Pros:
- Strong 1-year return of 37.63%. Competitive expense ratio of 0.38%. Focus on small to mid-cap U.S. equities.
Cons:
- Higher beta of 1.22 indicates more volatility. Limited bond exposure may not suit conservative investors. Max drawdown of -8.6% could concern risk-averse investors.
Performance Highlights: A Year of Impressive Returns
BSMAX has demonstrated remarkable performance over the past year, boasting a 1-year return of 37.63%. This impressive figure positions the fund favorably against its benchmark, the S&P 500 Total Return Index, which had a similar 1-year return of 37.62%. The fund’s ability to match the benchmark’s performance is noteworthy, especially considering its focus on the more volatile small to mid-cap segment. This performance is indicative of the fund’s effective management and strategic allocation within the U.S. equity market. Investors looking for robust returns in the small to mid-cap space may find BSMAX’s recent performance particularly appealing.
Portfolio Composition: A Diverse Smid Cap Mix
BSMAX’s portfolio is predominantly composed of U.S. equities, with a significant allocation to small (55.13%) and medium (25.19%) market cap stocks. The fund’s top holdings include EQT Corp, Lennox International Inc, and Packaging Corp of America, each contributing a small percentage to the overall portfolio. Sector-wise, the fund is well-diversified, with significant investments in Industrials (17.93%), Financials (14.96%), and Technology (14.39%). This diverse sector allocation helps mitigate risks associated with any single industry, providing a balanced approach to capturing growth opportunities across various segments of the economy.
Risk and Volatility: Understanding BSMAX’s Beta and Drawdown
Investors should be aware of the risk metrics associated with BSMAX. The fund has a beta of 1.22, indicating higher volatility compared to the market. This is typical for funds focused on small to mid-cap stocks, which tend to experience more price fluctuations. The fund’s maximum drawdown of -8.6% highlights the potential for significant short-term losses, although it also recovered quickly, with a drawdown length and recovery length of just one month each. These metrics suggest that while BSMAX offers substantial growth potential, it may not be suitable for risk-averse investors who are uncomfortable with higher volatility.
Expense Ratio: Competitive Costs for Active Management
BSMAX offers a competitive expense ratio of 0.38%, which is relatively low for actively managed funds in the small cap category. This cost efficiency is a significant advantage for investors, as lower expenses can lead to higher net returns over time. Compared to similar funds like Empower SmallCap Growth-Inst (MXMSX) and WCM SMID Quality Value-Inst (WCMFX), which have expense ratios of 0.84% and 0.85% respectively, BSMAX provides a cost-effective option for those looking to invest in the small to mid-cap space. This makes it an attractive choice for cost-conscious investors seeking active management without the high fees.
Comparative Analysis: How BSMAX Stacks Up Against Peers
When compared to similar funds, BSMAX holds its ground with a strong 1-year return of 37.63%, outperforming peers like Kennedy Capital ESG SMID Cap-I (KESGX) with a 1-year return of 35.14%. Its expense ratio of 0.38% is also more favorable than many of its competitors, offering a cost advantage. However, its beta of 1.22 is higher than some peers, indicating more volatility. This comparative analysis suggests that while BSMAX offers competitive returns and cost efficiency, investors should weigh these benefits against the potential for increased volatility when considering this fund as part of their portfolio.
Investor Suitability: Who Should Consider BSMAX?
BSMAX is well-suited for investors seeking growth and income through exposure to small to mid-cap U.S. equities. Its strong recent performance and competitive expense ratio make it an attractive option for those looking to capitalize on the growth potential of smaller companies. However, the fund’s higher beta and potential for significant drawdowns suggest it may be more appropriate for investors with a higher risk tolerance. Those who are comfortable with market volatility and are looking for a diversified portfolio within the small to mid-cap space may find BSMAX to be a fitting addition to their investment strategy.
Conclusion: BSMAX’s Unique Position in the Market
In conclusion, the iShares Russell Small/MidCap IxFd-InvA (BSMAX) stands out in the small cap category with its strong 1-year performance, competitive expense ratio, and diversified portfolio. While it offers significant growth potential, its higher volatility may not suit all investors. BSMAX is particularly appealing to those with a higher risk tolerance who are seeking to benefit from the dynamic small to mid-cap segment of the U.S. equity market. Its strategic allocation and effective management make it a compelling choice for investors looking to enhance their portfolio with a focus on growth and income.
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Futher Reading
https://www.morningstar.com/funds/xnas/BSMAX/quote
https://finance.yahoo.com/quote/BSMAX/”>Yahoo: iShares Russell Small/MidCap IxFd-InvA
https://ftcloud.fasttrack.net/web/chart/BSMAX
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