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Is T. Rowe Price Media & Telecomm (PRMTX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Tech fund? Starting with T. Rowe Price Media & Telecomm (PRMTX - Free Report) should not be a possibility at this time. PRMTX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine 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 Media & Telecomm made its debut in July of 1997, and since then, PRMTX has accumulated about $4.25 billion in assets, per the most up-to-date date available. The fund is currently managed by Paul D. Greene who has been in charge of the fund since May of 2013.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 19%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 17.34%, 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, PRMTX's standard deviation comes in at 13.74%, compared to the category average of 15.17%. The fund's standard deviation over the past 5 years is 12.92% compared to the category average of 14.49%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PRMTX's case, the fund lost 53.95% in the most recent bear market and underperformed its peer group by 0.64%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.05, the fund is likely to be more volatile than the market average. 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 positive alpha of 3.35, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 0.78% compared to the category average of 1.36%. From a cost perspective, PRMTX 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 Media & Telecomm has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Media & Telecomm looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PRMTX in the Sector - Tech 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 want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is T. Rowe Price Media & Telecomm (PRMTX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Tech fund? Starting with T. Rowe Price Media & Telecomm (PRMTX - Free Report) should not be a possibility at this time. PRMTX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine 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 Media & Telecomm made its debut in July of 1997, and since then, PRMTX has accumulated about $4.25 billion in assets, per the most up-to-date date available. The fund is currently managed by Paul D. Greene who has been in charge of the fund since May of 2013.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 19%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 17.34%, 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, PRMTX's standard deviation comes in at 13.74%, compared to the category average of 15.17%. The fund's standard deviation over the past 5 years is 12.92% compared to the category average of 14.49%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PRMTX's case, the fund lost 53.95% in the most recent bear market and underperformed its peer group by 0.64%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.05, the fund is likely to be more volatile than the market average. 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 positive alpha of 3.35, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 0.78% compared to the category average of 1.36%. From a cost perspective, PRMTX 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 Media & Telecomm has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Media & Telecomm looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PRMTX in the Sector - Tech 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 want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.