If investors are looking at the Mutual Fund Equity Report fund category, T. Rowe Price Equity Income Fund (PRFDX Quick QuotePRFDX - Free Report) could be a potential option. PRFDX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PRFDX. Since T. Rowe Price Equity Income Fund made its debut in October of 1985, PRFDX has garnered more than $14.63 billion in assets. The fund is currently managed by John Linehan who has been in charge of the fund since November of 2015.

Performance

Of course, investors look for strong performance in funds. PRFDX has a 5-year annualized total return of 11.02% 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 14.21%, 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. Over the past three years, PRFDX's standard deviation comes in at 19.94%, compared to the category average of 15.74%. The fund's standard deviation over the past 5 years is 17.24% compared to the category average of 13.88%. 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 0.98, which means it is hypothetically 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. With a negative alpha of -3.78, managers in this portfolio find it difficult to pick 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 mostly on equities that are traded in the United States.

As of the last filing date, the mutual fund has 91.99% of its assets in stocks, with an average market capitalization of $158.14 billion. The fund has the heaviest exposure to the following market sectors:

1. Finance
2. Industrial Cyclical
3. Non-Durable

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRFDX is a no load fund. It has an expense ratio of 0.63% compared to the category average of 0.99%. PRFDX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, T. Rowe Price Equity Income Fund ( PRFDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Equity Income Fund ( PRFDX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PRFDX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.