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Is T. Rowe Price Financial Services (PRISX) a Strong Mutual Fund Pick Right Now?
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Sector - Finance fund seekers should consider taking a look at T. Rowe Price Financial Services (PRISX - Free Report) . PRISX bears a Zacks Mutual Fund Rank of 1 (Strong 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 debuted in September of 1996. Since then, PRISX has accumulated assets of about $692.17 million, according to the most recently available information. The fund's current manager, Gabriel Solomon, has been in charge of the fund since April of 2014.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 17.66%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.79%, 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, PRISX's standard deviation comes in at 24.33%, compared to the category average of 20.52%. The fund's standard deviation over the past 5 years is 20.36% compared to the category average of 17.23%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PRISX has a 5-year beta of 1.13, which means it 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. PRISX has generated a negative alpha over the past five years of -0.3, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Currently, this mutual fund is holding 78.1% stock in stocks, which have an average market capitalization of $36.34 billion. This fund's turnover is about 52.9%, so the fund managers are making fewer trades than the average comparable fund.
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, PRISX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.55%. Looking at the fund from a cost perspective, PRISX is actually cheaper than its peers.
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, this fund looks like a good potential choice for investors right now.
For additional information on the Sector - Finance 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 PRISX 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 Financial Services (PRISX) a Strong Mutual Fund Pick Right Now?
Sector - Finance fund seekers should consider taking a look at T. Rowe Price Financial Services (PRISX - Free Report) . PRISX bears a Zacks Mutual Fund Rank of 1 (Strong 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 debuted in September of 1996. Since then, PRISX has accumulated assets of about $692.17 million, according to the most recently available information. The fund's current manager, Gabriel Solomon, has been in charge of the fund since April of 2014.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 17.66%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.79%, 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, PRISX's standard deviation comes in at 24.33%, compared to the category average of 20.52%. The fund's standard deviation over the past 5 years is 20.36% compared to the category average of 17.23%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PRISX has a 5-year beta of 1.13, which means it 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. PRISX has generated a negative alpha over the past five years of -0.3, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Currently, this mutual fund is holding 78.1% stock in stocks, which have an average market capitalization of $36.34 billion. This fund's turnover is about 52.9%, so the fund managers are making fewer trades than the average comparable fund.
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, PRISX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.55%. Looking at the fund from a cost perspective, PRISX is actually cheaper than its peers.
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, this fund looks like a good potential choice for investors right now.
For additional information on the Sector - Finance 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 PRISX 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.