Mutual Fund Equity Report fund seekers should consider taking a look at T. Rowe Price Diversified Mid-Cap Growth (PRDMX Quick QuotePRDMX - Free Report) . PRDMX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

T. Rowe Price is responsible for PRDMX, and the company is based out of Baltimore, MD. The T. Rowe Price Diversified Mid-Cap Growth made its debut in January of 2004 and PRDMX has managed to accumulate roughly $922 million in assets, as of the most recently available information. Donald J. Peters is the fund's current manager and has held that role since January of 2004.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.35%, 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 8.7%, which places it in the middle 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 21.66%, the standard deviation of PRDMX over the past three years is 24.28%. The standard deviation of the fund over the past 5 years is 21.42% compared to the category average of 18.94%. 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. PRDMX has a 5-year beta of 1.06, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -0.46, 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.

Currently, this mutual fund is holding 90.9% stock in stocks, with an average market capitalization of $25.82 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Retail Trade
• Industrial Cyclical

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRDMX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 1.15%. Looking at the fund from a cost perspective, PRDMX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.

Bottom Line

Overall, T. Rowe Price Diversified Mid-Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Diversified Mid-Cap Growth ( PRDMX ) 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.