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Is T. Rowe Price New America Growth (PRWAX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price New America Growth (PRWAX - Free Report) . PRWAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRWAX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRWAX. The T. Rowe Price New America Growth made its debut in September of 1985 and PRWAX has managed to accumulate roughly $6.32 billion in assets, as of the most recently available information. The fund's current manager, Justin White, has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 24.81%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 24%, which places it in the top 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. PRWAX's standard deviation over the past three years is 20.15% compared to the category average of 16.66%. Over the past 5 years, the standard deviation of the fund is 16.52% compared to the category average of 13.73%. 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 1.02, so it is likely going to be as volatile as 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. PRWAX has generated a positive alpha over the past five years of 6.65, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
The mutual fund currently has 89.25% of its holdings in stocks, with an average market capitalization of $382.28 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
With turnover at about 69.6%, this fund is making more trades per year than the comparable average.
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, PRWAX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.02%. Looking at the fund from a cost perspective, PRWAX is actually cheaper than its peers.
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 New America Growth ( PRWAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on PRWAXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is T. Rowe Price New America Growth (PRWAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price New America Growth (PRWAX - Free Report) . PRWAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRWAX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRWAX. The T. Rowe Price New America Growth made its debut in September of 1985 and PRWAX has managed to accumulate roughly $6.32 billion in assets, as of the most recently available information. The fund's current manager, Justin White, has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 24.81%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 24%, which places it in the top 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. PRWAX's standard deviation over the past three years is 20.15% compared to the category average of 16.66%. Over the past 5 years, the standard deviation of the fund is 16.52% compared to the category average of 13.73%. 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 1.02, so it is likely going to be as volatile as 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. PRWAX has generated a positive alpha over the past five years of 6.65, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
The mutual fund currently has 89.25% of its holdings in stocks, with an average market capitalization of $382.28 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
With turnover at about 69.6%, this fund is making more trades per year than the comparable average.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, PRWAX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.02%. Looking at the fund from a cost perspective, PRWAX is actually cheaper than its peers.
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 New America Growth ( PRWAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on PRWAXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.