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Is T. Rowe Price Financial Services (PRISX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Sector - Finance fund could think about starting with T. Rowe Price Financial Services (PRISX - Free Report) . PRISX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRISX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRISX. T. Rowe Price Financial Services made its debut in September of 1996, and since then, PRISX has accumulated about $662.01 million in assets, per the most up-to-date date available. The fund is currently managed by Gabriel Solomon who has been in charge of the fund since April of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. PRISX has a 5-year annualized total return of 9.16% 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 13.31%, 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 17.14%, the standard deviation of PRISX over the past three years is 14.07%. The standard deviation of the fund over the past 5 years is 14.93% compared to the category average of 16.46%. 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 PRISX's case, the fund lost 59.27% in the most recent bear market and outperformed its peer group by 2%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.02, the fund is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -0.7. This means that managers in this portfolio find it difficult to pick 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 90.74% of its assets in stocks, and these companies have an average market capitalization of $88.27 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Other
Turnover is about 34.4%, so those in charge of the fund make fewer trades than its comparable peers.
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, PRISX is a no load fund. It has an expense ratio of 0.84% compared to the category average of 1.41%. So, PRISX 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.
Bottom Line
Overall, T. Rowe Price Financial Services ( PRISX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Financial Services ( PRISX ) looks like a good potential choice for investors right now.
Your research on the Sector - Finance segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is T. Rowe Price Financial Services (PRISX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Sector - Finance fund could think about starting with T. Rowe Price Financial Services (PRISX - Free Report) . PRISX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PRISX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRISX. T. Rowe Price Financial Services made its debut in September of 1996, and since then, PRISX has accumulated about $662.01 million in assets, per the most up-to-date date available. The fund is currently managed by Gabriel Solomon who has been in charge of the fund since April of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. PRISX has a 5-year annualized total return of 9.16% 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 13.31%, 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 17.14%, the standard deviation of PRISX over the past three years is 14.07%. The standard deviation of the fund over the past 5 years is 14.93% compared to the category average of 16.46%. 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 PRISX's case, the fund lost 59.27% in the most recent bear market and outperformed its peer group by 2%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.02, the fund is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -0.7. This means that managers in this portfolio find it difficult to pick 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 90.74% of its assets in stocks, and these companies have an average market capitalization of $88.27 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Other
Turnover is about 34.4%, so those in charge of the fund make fewer trades than its comparable peers.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, PRISX is a no load fund. It has an expense ratio of 0.84% compared to the category average of 1.41%. So, PRISX 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.
Bottom Line
Overall, T. Rowe Price Financial Services ( PRISX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Financial Services ( PRISX ) looks like a good potential choice for investors right now.
Your research on the Sector - Finance segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.