Personally I do not like expensive funds and 2.2% is VERY expensive. But according to Morningstar KAUAX has ranked in the top 20% of all funds in the mid cap growth category for the past 1-, 3- and 5-year period despite the high fees. This year of course the high fees have contributed to its underperformance relative to other mid cap growth funds, but that alone may not be compelling enough to bail out of this fund right now IMO. However, high fees makes it harder to this fund to keep outperforming its peers over the long term, so it may be wise to look at cheaper alternatives.
As for switching from a mid cap growth fund to an S&P 500 fund or international fund right now, it is probably OK because all three fund categories have been hammered almost equally in the past year. Just make sure you don't throw your asset allocation out when you do the exchange.
42 y/o, married, retirement portfolio = 45 x annual expenses