We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is T. Rowe Price Equity Income Fund (PRFDX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
If investors are looking at the Mutual Fund Equity Report fund category, T. Rowe Price Equity Income Fund (PRFDX - Free Report) could be a potential option. PRFDX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PRFDX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Equity Income Fund made its debut in October of 1985, and since then, PRFDX has accumulated about $8.38 billion in assets, per the most up-to-date date available. John Linehan is the fund's current manager and has held that role since November of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 6.29%, and is in the middle 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 13.43%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, PRFDX's standard deviation comes in at 18.72%, compared to the category average of 15.03%. The standard deviation of the fund over the past 5 years is 19.96% compared to the category average of 16.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.94, so it is likely going to be less volatile than the market at large. 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 -2.57. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
Right now, 76.02% of this mutual fund's holdings are stocks and it has 11.1% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Turnover is about 18.8%, so those in charge of the fund make fewer trades than its comparable peers.
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, PRFDX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.98%. So, PRFDX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Equity Income Fund ( PRFDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
This could just be the start of your research on PRFDXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is T. Rowe Price Equity Income Fund (PRFDX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mutual Fund Equity Report fund category, T. Rowe Price Equity Income Fund (PRFDX - Free Report) could be a potential option. PRFDX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PRFDX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Equity Income Fund made its debut in October of 1985, and since then, PRFDX has accumulated about $8.38 billion in assets, per the most up-to-date date available. John Linehan is the fund's current manager and has held that role since November of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 6.29%, and is in the middle 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 13.43%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, PRFDX's standard deviation comes in at 18.72%, compared to the category average of 15.03%. The standard deviation of the fund over the past 5 years is 19.96% compared to the category average of 16.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.94, so it is likely going to be less volatile than the market at large. 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 -2.57. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
Right now, 76.02% of this mutual fund's holdings are stocks and it has 11.1% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
Turnover is about 18.8%, so those in charge of the fund make fewer trades than its comparable peers.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, PRFDX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.98%. So, PRFDX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Equity Income Fund ( PRFDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
This could just be the start of your research on PRFDXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.