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Is T. Rowe Price Small Cap Stock Fund (OTCFX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Small Cap Stock Fund (OTCFX - Free Report) . OTCFX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various 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 OTCFX. T. Rowe Price Small Cap Stock Fund made its debut in June of 1956, and since then, OTCFX has accumulated about $2.39 billion in assets, per the most up-to-date date available. The fund is currently managed by Frank Alonso who has been in charge of the fund since October of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.38%, and is in the top 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 7.75%, 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 20.34%, the standard deviation of OTCFX over the past three years is 18.39%. Looking at the past 5 years, the fund's standard deviation is 20.96% compared to the category average of 18.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.02, so investors should note that it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. OTCFX's 5-year performance has produced a negative alpha of -3.9, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 97.72% of this mutual fund's holdings are stocks, which have an average market capitalization of $6.74 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Other
Technology
Industrial Cyclical
With turnover at about 24.3%, this fund is making fewer trades than its comparable peers.
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, OTCFX is a no load fund. It has an expense ratio of 0.91% compared to the category average of 1.06%. Looking at the fund from a cost perspective, OTCFX 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 Small Cap Stock Fund ( OTCFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Small Cap Stock Fund ( OTCFX ) looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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 Small Cap Stock Fund (OTCFX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Small Cap Stock Fund (OTCFX - Free Report) . OTCFX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various 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 OTCFX. T. Rowe Price Small Cap Stock Fund made its debut in June of 1956, and since then, OTCFX has accumulated about $2.39 billion in assets, per the most up-to-date date available. The fund is currently managed by Frank Alonso who has been in charge of the fund since October of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.38%, and is in the top 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 7.75%, 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 20.34%, the standard deviation of OTCFX over the past three years is 18.39%. Looking at the past 5 years, the fund's standard deviation is 20.96% compared to the category average of 18.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.02, so investors should note that it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. OTCFX's 5-year performance has produced a negative alpha of -3.9, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 97.72% of this mutual fund's holdings are stocks, which have an average market capitalization of $6.74 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Other
- Technology
- Industrial Cyclical
With turnover at about 24.3%, this fund is making fewer trades than its comparable peers.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, OTCFX is a no load fund. It has an expense ratio of 0.91% compared to the category average of 1.06%. Looking at the fund from a cost perspective, OTCFX 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 Small Cap Stock Fund ( OTCFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Small Cap Stock Fund ( OTCFX ) looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.