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Is T. Rowe Price New Horizons (PRNHX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Small Cap Growth fund? Starting with T. Rowe Price New Horizons (PRNHX - Free Report) is one possibility. PRNHX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRNHX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRNHX. T. Rowe Price New Horizons made its debut in June of 1960, and since then, PRNHX has accumulated about $19.81 billion in assets, per the most up-to-date date available. Henry M. Ellenbogen is the fund's current manager and has held that role since March of 2010.
Performance
Of course, investors look for strong performance in funds. PRNHX has a 5-year annualized total return of 10.33% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.82%, 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. Compared to the category average of 12.59%, the standard deviation of PRNHX over the past three years is 14.27%. Over the past 5 years, the standard deviation of the fund is 14% compared to the category average of 12.34%. This makes the fund more 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 PRNHX's case, the fund lost 49.91% in the most recent bear market and outperformed its peer group by 3.06%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.06, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a positive alpha of 1.65. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, PRNHX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 1.25%. Looking at the fund from a cost perspective, PRNHX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price New Horizons ( PRNHX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Small Cap Growth 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 PRNHX too 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 New Horizons (PRNHX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Small Cap Growth fund? Starting with T. Rowe Price New Horizons (PRNHX - Free Report) is one possibility. PRNHX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRNHX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRNHX. T. Rowe Price New Horizons made its debut in June of 1960, and since then, PRNHX has accumulated about $19.81 billion in assets, per the most up-to-date date available. Henry M. Ellenbogen is the fund's current manager and has held that role since March of 2010.
Performance
Of course, investors look for strong performance in funds. PRNHX has a 5-year annualized total return of 10.33% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.82%, 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. Compared to the category average of 12.59%, the standard deviation of PRNHX over the past three years is 14.27%. Over the past 5 years, the standard deviation of the fund is 14% compared to the category average of 12.34%. This makes the fund more 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 PRNHX's case, the fund lost 49.91% in the most recent bear market and outperformed its peer group by 3.06%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.06, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a positive alpha of 1.65. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, PRNHX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 1.25%. Looking at the fund from a cost perspective, PRNHX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price New Horizons ( PRNHX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Small Cap Growth 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 PRNHX too 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.