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Is T. Rowe Price Communications & Technology Fund (PRMTX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Sector - Tech fund could think about starting with T. Rowe Price Communications & Technology Fund (PRMTX - Free Report) . PRMTX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PRMTX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRMTX. T. Rowe Price Communications & Technology Fund made its debut in July of 1997, and since then, PRMTX has accumulated about $4.36 billion in assets, per the most up-to-date date available. The fund is currently managed by James Stillwagon who has been in charge of the fund since November of 2019.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.93%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.36%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. The standard deviation of PRMTX over the past three years is 21.39% compared to the category average of 17.22%. Looking at the past 5 years, the fund's standard deviation is 20.19% compared to the category average of 17.34%. 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 0.95, which means it is hypothetically less volatile than 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. Over the past 5 years, the fund has a negative alpha of -1.06. This means that 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, 88.41% of this mutual fund's holdings are stocks, which have an average market capitalization of $370.40 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Non-Durable
Turnover is 42.8%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, PRMTX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 0.93%. From a cost perspective, PRMTX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Communications & Technology Fund ( PRMTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Communications & Technology Fund ( PRMTX ) looks like a good potential choice for investors right now.
Your research on the Sector - Tech 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. 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.
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Is T. Rowe Price Communications & Technology Fund (PRMTX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Sector - Tech fund could think about starting with T. Rowe Price Communications & Technology Fund (PRMTX - Free Report) . PRMTX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PRMTX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRMTX. T. Rowe Price Communications & Technology Fund made its debut in July of 1997, and since then, PRMTX has accumulated about $4.36 billion in assets, per the most up-to-date date available. The fund is currently managed by James Stillwagon who has been in charge of the fund since November of 2019.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.93%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.36%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. The standard deviation of PRMTX over the past three years is 21.39% compared to the category average of 17.22%. Looking at the past 5 years, the fund's standard deviation is 20.19% compared to the category average of 17.34%. 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 0.95, which means it is hypothetically less volatile than 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. Over the past 5 years, the fund has a negative alpha of -1.06. This means that 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, 88.41% of this mutual fund's holdings are stocks, which have an average market capitalization of $370.40 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Non-Durable
Turnover is 42.8%, which means, on average, the fund makes fewer trades than the average comparable fund.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, PRMTX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 0.93%. From a cost perspective, PRMTX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Communications & Technology Fund ( PRMTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Communications & Technology Fund ( PRMTX ) looks like a good potential choice for investors right now.
Your research on the Sector - Tech 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. 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.