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Is T. Rowe Price Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Small Cap Value fund could think about starting with T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) . PRSVX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Value mutual funds is an area filled with options, such as PRSVX. Small Cap Value funds invest in small companies with stock market valuation less than $2 billion. These funds offer more bang for an owner's buck, providing low P/E ratios, high dividend yields, and better-than-average P/S ratios.
History of Fund/Manager
PRSVX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Small Cap Value Fund debuted in June of 1988. Since then, PRSVX has accumulated assets of about $4.50 billion, according to the most recently available information. The fund's current manager, J. Wagner, has been in charge of the fund since June of 2014.
Performance
Investors naturally seek funds with strong performance. PRSVX has a 5-year annualized total return of 7% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.37%, which places it in the middle 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. Over the past three years, PRSVX's standard deviation comes in at 19.37%, compared to the category average of 15.84%. The fund's standard deviation over the past 5 years is 22.04% compared to the category average of 17.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that it is hypothetically more 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. PRSVX has generated a negative alpha over the past five years of -6.56, demonstrating 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.
As of the last filing date, the mutual fund has 96.73% of its assets in stocks, and these companies have an average market capitalization of $4.45 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Other
This fund's turnover is about 27.8%, so the fund managers are making fewer trades than comparable funds.
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, PRSVX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 0.98%. So, PRSVX is actually cheaper than its peers from a cost perspective.
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, even with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Small Cap Value Fund ( PRSVX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
This could just be the start of your research on PRSVXin the Small Cap Value 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is T. Rowe Price Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Small Cap Value fund could think about starting with T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) . PRSVX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Value mutual funds is an area filled with options, such as PRSVX. Small Cap Value funds invest in small companies with stock market valuation less than $2 billion. These funds offer more bang for an owner's buck, providing low P/E ratios, high dividend yields, and better-than-average P/S ratios.
History of Fund/Manager
PRSVX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Small Cap Value Fund debuted in June of 1988. Since then, PRSVX has accumulated assets of about $4.50 billion, according to the most recently available information. The fund's current manager, J. Wagner, has been in charge of the fund since June of 2014.
Performance
Investors naturally seek funds with strong performance. PRSVX has a 5-year annualized total return of 7% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.37%, which places it in the middle 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. Over the past three years, PRSVX's standard deviation comes in at 19.37%, compared to the category average of 15.84%. The fund's standard deviation over the past 5 years is 22.04% compared to the category average of 17.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that it is hypothetically more 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. PRSVX has generated a negative alpha over the past five years of -6.56, demonstrating 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.
As of the last filing date, the mutual fund has 96.73% of its assets in stocks, and these companies have an average market capitalization of $4.45 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Other
This fund's turnover is about 27.8%, so the fund managers are making fewer trades than comparable funds.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, PRSVX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 0.98%. So, PRSVX is actually cheaper than its peers from a cost perspective.
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, even with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Small Cap Value Fund ( PRSVX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
This could just be the start of your research on PRSVXin the Small Cap Value 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.