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Is T. Rowe Price Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Small Cap Value fund? T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) is a potential starting point. 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
Zacks categorizes PRSVX as Small Cap Value, which is a segment packed with options. Known for investing in companies with market caps under $2 billion, Small Cap Value mutual funds represent good value because of many things; stocks in these funds offer low P/E ratios, high dividend yields, and better-than-average P/S ratios.
History of Fund/Manager
T. Rowe Price is responsible for PRSVX, and the company is based out of Baltimore, MD. The T. Rowe Price Small Cap Value Fund made its debut in June of 1988 and PRSVX has managed to accumulate roughly $8.02 billion in assets, as of the most recently available information. The fund is currently managed by J. Wagner who has been in charge of the fund since June of 2014.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.54%, 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 3.26%, 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 11.63%, the standard deviation of PRSVX over the past three years is 15.58%. The fund's standard deviation over the past 5 years is 14.86% compared to the category average of 11.8%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In PRSVX's case, the fund lost 47.38% in the most recent bear market and outperformed its peer group by 4%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -2.4. 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 primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.51% of its assets in stocks, with an average market capitalization of $3.09 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Other
Industrial Cyclical
With turnover at about 22.3%, this fund is making fewer trades than comparable funds.
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 0.77% compared to the category average of 1.28%. PRSVX is actually cheaper than its peers when you consider factors like cost.
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 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, T. Rowe Price Small Cap Value Fund ( PRSVX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Value, 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 Small Cap Value Fund (PRSVX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Small Cap Value fund? T. Rowe Price Small Cap Value Fund (PRSVX - Free Report) is a potential starting point. 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
Zacks categorizes PRSVX as Small Cap Value, which is a segment packed with options. Known for investing in companies with market caps under $2 billion, Small Cap Value mutual funds represent good value because of many things; stocks in these funds offer low P/E ratios, high dividend yields, and better-than-average P/S ratios.
History of Fund/Manager
T. Rowe Price is responsible for PRSVX, and the company is based out of Baltimore, MD. The T. Rowe Price Small Cap Value Fund made its debut in June of 1988 and PRSVX has managed to accumulate roughly $8.02 billion in assets, as of the most recently available information. The fund is currently managed by J. Wagner who has been in charge of the fund since June of 2014.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.54%, 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 3.26%, 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 11.63%, the standard deviation of PRSVX over the past three years is 15.58%. The fund's standard deviation over the past 5 years is 14.86% compared to the category average of 11.8%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In PRSVX's case, the fund lost 47.38% in the most recent bear market and outperformed its peer group by 4%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -2.4. 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 primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.51% of its assets in stocks, with an average market capitalization of $3.09 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Other
- Industrial Cyclical
With turnover at about 22.3%, this fund is making fewer trades than comparable funds.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 0.77% compared to the category average of 1.28%. PRSVX is actually cheaper than its peers when you consider factors like cost.
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 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, T. Rowe Price Small Cap Value Fund ( PRSVX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Value, 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.