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Is T. Rowe Price Institutional Mid-Cap Equity Growth (PMEGX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Mid Cap Growth fund could think about starting with T. Rowe Price Institutional Mid-Cap Equity Growth (PMEGX - Free Report) . PMEGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PMEGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
T. Rowe Price is responsible for PMEGX, and the company is based out of Baltimore, MD. T. Rowe Price Institutional Mid-Cap Equity Growth made its debut in July of 1996, and since then, PMEGX has accumulated about $5.28 billion in assets, per the most up-to-date date available. Brian W. H. Berghuis is the fund's current manager and has held that role since July of 1996.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 10.38%, and it sits 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 4.07%, 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, PMEGX's standard deviation comes in at 19.01%, compared to the category average of 22.02%. Looking at the past 5 years, the fund's standard deviation is 20.59% compared to the category average of 22.58%. This makes the fund less 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. PMEGX has a 5-year beta of 1.06, which means it is likely to be more volatile than the market average. 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. PMEGX's 5-year performance has produced a negative alpha of -4.48, which means 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 largely on equities that are traded in the United States.
This fund is currently holding about 76.73% in stocks, which have an average market capitalization of $27.36 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Turnover is 28.6%, which means this fund makes fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PMEGX is a no load fund. It has an expense ratio of 0.61% compared to the category average of 1.05%. From a cost perspective, PMEGX is actually cheaper than its peers.
While the minimum initial investment for the product is $1 million, investors should also note that there is no minimum for each subsequent investment.
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 Institutional Mid-Cap Equity Growth ( PMEGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Institutional Mid-Cap Equity Growth ( PMEGX ) looks like a great potential choice for investors right now.
For additional information on the Mid Cap Growth 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 PMEGX 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 Institutional Mid-Cap Equity Growth (PMEGX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mid Cap Growth fund could think about starting with T. Rowe Price Institutional Mid-Cap Equity Growth (PMEGX - Free Report) . PMEGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PMEGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
T. Rowe Price is responsible for PMEGX, and the company is based out of Baltimore, MD. T. Rowe Price Institutional Mid-Cap Equity Growth made its debut in July of 1996, and since then, PMEGX has accumulated about $5.28 billion in assets, per the most up-to-date date available. Brian W. H. Berghuis is the fund's current manager and has held that role since July of 1996.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 10.38%, and it sits 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 4.07%, 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, PMEGX's standard deviation comes in at 19.01%, compared to the category average of 22.02%. Looking at the past 5 years, the fund's standard deviation is 20.59% compared to the category average of 22.58%. This makes the fund less 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. PMEGX has a 5-year beta of 1.06, which means it is likely to be more volatile than the market average. 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. PMEGX's 5-year performance has produced a negative alpha of -4.48, which means 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 largely on equities that are traded in the United States.
This fund is currently holding about 76.73% in stocks, which have an average market capitalization of $27.36 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
Turnover is 28.6%, which means this fund makes fewer trades than comparable funds.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PMEGX is a no load fund. It has an expense ratio of 0.61% compared to the category average of 1.05%. From a cost perspective, PMEGX is actually cheaper than its peers.
While the minimum initial investment for the product is $1 million, investors should also note that there is no minimum for each subsequent investment.
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 Institutional Mid-Cap Equity Growth ( PMEGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Institutional Mid-Cap Equity Growth ( PMEGX ) looks like a great potential choice for investors right now.
For additional information on the Mid Cap Growth 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 PMEGX 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.