Mackenzie Lamm
Finance 450
11/18/14
Mutual Fund Paper
Analysis of Northern Small Cap Value Fund The following information will outline and overview the Northern Small Cap Value Mutual Fund and whether or not the fund should be chosen as one of the investments currently offered for the employees’ 401-K plan at Rick Lamm and Associates. This report will first, cover the category and nature of the mutual fund, the strategy involved, and what type of investor would be interested. Second, the performance of the mutual fund, comparing the fund’s various returns to its respective category and index. Third, analyze the risks of the fund, and compare those risks with category averages. Fourth, the costs of the fund and how they compare with other funds of its nature. Fifth, the funds’ manager. To conclude, a recommendation will be offered whether or not the Northern Small Cap Value Mutual Fund should or should not be included in Rick Lamm and Associates’ 401-K plan. The Northern Small Cap Value Fund is an open ended mutual fund which looks for value potential (worth more than indicated current prices) by in the stocks of smaller companies. According to Northern Trust, the fund has 500 holdings and is mainly made up of four economic sectors. 37.5% of those holdings in financials, 15% in industrials, 12.2% in information technology, and 10.2% in consumer discretionary goods and services (Northern Trust). As stated on Northern Trust, the funds strategy to gain capital appreciation is to “Follow a quantitative, active equity strategy that selects stocks based on a statistical analysis of historical relationships among value characteristics, stock prices and market capitalization ranges. Use a screening process designed to reduce exposure to stocks with negative fundamental indicators. Maintain a highly diversified portfolio, consistent with small-cap value benchmarks, in