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Is T. Rowe Price New Era (PRNEX) a Strong Mutual Fund Pick Right Now?

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Sector - Energy fund seekers may want to consider taking a look at T. Rowe Price New Era (PRNEX - Free Report) . PRNEX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify PRNEX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.

History of Fund/Manager

PRNEX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price New Era debuted in January of 1969. Since then, PRNEX has accumulated assets of about $1.67 billion, according to the most recently available information. The fund's current manager, Shinwoo Kim, has been in charge of the fund since June of 2021.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.07%, and is 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 2.96%, 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 21.67%, the standard deviation of PRNEX over the past three years is 25.21%. The standard deviation of the fund over the past 5 years is 20.36% compared to the category average of 17.73%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.2, 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. PRNEX has generated a negative alpha over the past five years of -13.14, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, PRNEX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.53%. From a cost perspective, PRNEX 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 New Era ( PRNEX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price New Era ( PRNEX ) looks like a somewhat average choice for investors right now.

For additional information on the Sector - Energy 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 PRNEX 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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