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Is T. Rowe Price Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Small Cap Value funds, a place to start could be T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) . PRSVX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine 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 is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price Small Cap Value Fund made its debut in June of 1988, and since then, PRSVX has accumulated about $8.60 billion in assets, per the most up-to-date date available. The fund is currently managed by J. David Wagner who has been in charge of the fund since June of 2014.
Performance
Of course, investors look for strong performance in funds. PRSVX has a 5-year annualized total return of 12.43% and is 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 17.55%, 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, PRSVX's standard deviation comes in at 11.94%, compared to the category average of 10.4%. The fund's standard deviation over the past 5 years is 12.1% compared to the category average of 10.17%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In PRSVX's case, the fund lost 47.38% in the most recent bear market and underperformed its peer group by 3.8%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PRSVX has a 5-year beta of 0.93, which means it is likely to be less 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. Over the past 5 years, the fund has a negative alpha of -0.66. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, PRSVX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.27%. So, PRSVX is actually cheaper than its peers from a cost perspective.
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 Value Fund ( PRSVX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Small Cap Value area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PRSVX too 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 Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Small Cap Value funds, a place to start could be T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) . PRSVX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine 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 is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price Small Cap Value Fund made its debut in June of 1988, and since then, PRSVX has accumulated about $8.60 billion in assets, per the most up-to-date date available. The fund is currently managed by J. David Wagner who has been in charge of the fund since June of 2014.
Performance
Of course, investors look for strong performance in funds. PRSVX has a 5-year annualized total return of 12.43% and is 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 17.55%, 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, PRSVX's standard deviation comes in at 11.94%, compared to the category average of 10.4%. The fund's standard deviation over the past 5 years is 12.1% compared to the category average of 10.17%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In PRSVX's case, the fund lost 47.38% in the most recent bear market and underperformed its peer group by 3.8%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PRSVX has a 5-year beta of 0.93, which means it is likely to be less 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. Over the past 5 years, the fund has a negative alpha of -0.66. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, PRSVX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.27%. So, PRSVX is actually cheaper than its peers from a cost perspective.
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 Value Fund ( PRSVX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Small Cap Value area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PRSVX too 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.