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Is T. Rowe Price Growth Stock Fund (PRGFX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Large Cap Growth fund could think about starting with T. Rowe Price Growth Stock Fund (PRGFX - Free Report) . PRGFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRGFX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRGFX. T. Rowe Price Growth Stock Fund debuted in April of 1950. Since then, PRGFX has accumulated assets of about $38.19 billion, according to the most recently available information. The fund's current manager, Joseph B. Fath, has been in charge of the fund since January of 2014.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 12.81%, 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 17.85%, 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, PRGFX's standard deviation comes in at 13.28%, compared to the category average of 10.08%. Over the past 5 years, the standard deviation of the fund is 13.73% compared to the category average of 9.93%. 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 the most recent bear market, PRGFX lost 49.13% and underperformed comparable funds by 0.29%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.08, the fund is likely to be more volatile than the market average. 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. With a positive alpha of 1.12, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 89.02% of its assets in stocks, with an average market capitalization of $317.55 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
With turnover at about 49%, this fund makes fewer trades than its comparable peers.
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, PRGFX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.05%. Looking at the fund from a cost perspective, PRGFX 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 Growth Stock Fund ( PRGFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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 Growth Stock Fund (PRGFX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Growth fund could think about starting with T. Rowe Price Growth Stock Fund (PRGFX - Free Report) . PRGFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRGFX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRGFX. T. Rowe Price Growth Stock Fund debuted in April of 1950. Since then, PRGFX has accumulated assets of about $38.19 billion, according to the most recently available information. The fund's current manager, Joseph B. Fath, has been in charge of the fund since January of 2014.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 12.81%, 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 17.85%, 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, PRGFX's standard deviation comes in at 13.28%, compared to the category average of 10.08%. Over the past 5 years, the standard deviation of the fund is 13.73% compared to the category average of 9.93%. 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 the most recent bear market, PRGFX lost 49.13% and underperformed comparable funds by 0.29%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.08, the fund is likely to be more volatile than the market average. 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. With a positive alpha of 1.12, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 89.02% of its assets in stocks, with an average market capitalization of $317.55 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
With turnover at about 49%, this fund makes fewer trades than its comparable peers.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, PRGFX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.05%. Looking at the fund from a cost perspective, PRGFX 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 Growth Stock Fund ( PRGFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.