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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
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Large Cap Growth fund seekers should consider taking a look at T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) . PREFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
PREFX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Tax-Efficient Equity made its debut in December of 2000, and since then, PREFX has accumulated about $578.65 million in assets, per the most up-to-date date available. The fund's current manager, Donald J. Peters, has been in charge of the fund since December of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 19.36%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 22.36%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 17.53%, the standard deviation of PREFX over the past three years is 20.51%. The standard deviation of the fund over the past 5 years is 17.09% compared to the category average of 14.77%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.08, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 2.8. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PREFX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.04%. PREFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, T. Rowe Price Tax-Efficient Equity ( PREFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Tax-Efficient Equity ( PREFX ) looks like a good potential choice for investors right now.
Want even more information about PREFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should consider taking a look at T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) . PREFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
PREFX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Tax-Efficient Equity made its debut in December of 2000, and since then, PREFX has accumulated about $578.65 million in assets, per the most up-to-date date available. The fund's current manager, Donald J. Peters, has been in charge of the fund since December of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 19.36%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 22.36%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 17.53%, the standard deviation of PREFX over the past three years is 20.51%. The standard deviation of the fund over the past 5 years is 17.09% compared to the category average of 14.77%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.08, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 2.8. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PREFX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.04%. PREFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, T. Rowe Price Tax-Efficient Equity ( PREFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Tax-Efficient Equity ( PREFX ) looks like a good potential choice for investors right now.
Want even more information about PREFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.