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Is T. Rowe Price Diversified Mid Cap Growth (PRDMX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Mid Cap Growth fund category, T. Rowe Price Diversified Mid Cap Growth (PRDMX - Free Report) could be a potential option. PRDMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRDMX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRDMX. T. Rowe Price Diversified Mid Cap Growth debuted in January of 2004. Since then, PRDMX has accumulated assets of about $1.91 billion, according to the most recently available information. Donald J. Peters is the fund's current manager and has held that role since January of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 20.59%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 21.26%, 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. PRDMX's standard deviation over the past three years is 21.58% compared to the category average of 18.95%. The fund's standard deviation over the past 5 years is 17.32% compared to the category average of 15.41%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.07, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. PRDMX's 5-year performance has produced a positive alpha of 1.48, which means 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, PRDMX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.17%. So, PRDMX is actually cheaper than its peers from a cost perspective.
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 Diversified Mid Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is T. Rowe Price Diversified Mid Cap Growth (PRDMX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mid Cap Growth fund category, T. Rowe Price Diversified Mid Cap Growth (PRDMX - Free Report) could be a potential option. PRDMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRDMX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRDMX. T. Rowe Price Diversified Mid Cap Growth debuted in January of 2004. Since then, PRDMX has accumulated assets of about $1.91 billion, according to the most recently available information. Donald J. Peters is the fund's current manager and has held that role since January of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 20.59%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 21.26%, 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. PRDMX's standard deviation over the past three years is 21.58% compared to the category average of 18.95%. The fund's standard deviation over the past 5 years is 17.32% compared to the category average of 15.41%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.07, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. PRDMX's 5-year performance has produced a positive alpha of 1.48, which means 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, PRDMX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.17%. So, PRDMX is actually cheaper than its peers from a cost perspective.
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 Diversified Mid Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.