If you have been looking for Mid Cap Growth funds, a place to start could be T. Rowe Price Diversified Mid-Cap Growth (PRDMX Quick QuotePRDMX - Free Report) . PRDMX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that PRDMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PRDMX. Since T. Rowe Price Diversified Mid-Cap Growth made its debut in January of 2004, PRDMX has garnered more than $1 billion in assets. The fund is currently managed by Donald J. Peters who has been in charge of the fund since January of 2004.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 10.52%, 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 0.19%, 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. Compared to the category average of 0%, the standard deviation of PRDMX over the past three years is 20.14%. The fund's standard deviation over the past 5 years is 21.04% compared to the category average of 86%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.07, the fund 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. PRDMX has generated a negative alpha over the past five years of -5.07, demonstrating that 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 principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 82.49% of its assets in stocks, which have an average market capitalization of $32.30 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Retail Trade
• Services

Turnover is about 49.7%, so those in charge of the fund make roughly the same amount of trades as the category average, in a given year.

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, PRDMX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 88%. So, PRDMX 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 Diversified Mid-Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better 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 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 PRDMX too 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.