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Is T. Rowe Price Small Cap Stock Fund (OTCFX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Small Cap Blend fund could think about starting with T. Rowe Price Small Cap Stock Fund (OTCFX - Free Report) . OTCFX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify OTCFX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of OTCFX. T. Rowe Price Small Cap Stock Fund made its debut in June of 1956, and since then, OTCFX has accumulated about $2.41 billion in assets, per the most up-to-date date available. The fund's current manager, Frank Alonso, has been in charge of the fund since October of 2016.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. OTCFX has a 5-year annualized total return of 10.03% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.36%, 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, OTCFX's standard deviation comes in at 20.39%, compared to the category average of 16.16%. The standard deviation of the fund over the past 5 years is 21.35% compared to the category average of 17.34%. 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 1.04, so it is likely going to be more volatile than the market at large. 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. OTCFX has generated a negative alpha over the past five years of -4.89, 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, OTCFX is a no load fund. It has an expense ratio of 0.90% compared to the category average of 1.01%. Looking at the fund from a cost perspective, OTCFX 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.
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 Small Cap Stock Fund ( OTCFX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Small Cap Stock Fund ( OTCFX ) looks like a somewhat average choice for investors right now.
This could just be the start of your research on OTCFXin the Small Cap Blend 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. 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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Is T. Rowe Price Small Cap Stock Fund (OTCFX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Small Cap Blend fund could think about starting with T. Rowe Price Small Cap Stock Fund (OTCFX - Free Report) . OTCFX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify OTCFX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of OTCFX. T. Rowe Price Small Cap Stock Fund made its debut in June of 1956, and since then, OTCFX has accumulated about $2.41 billion in assets, per the most up-to-date date available. The fund's current manager, Frank Alonso, has been in charge of the fund since October of 2016.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. OTCFX has a 5-year annualized total return of 10.03% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.36%, 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, OTCFX's standard deviation comes in at 20.39%, compared to the category average of 16.16%. The standard deviation of the fund over the past 5 years is 21.35% compared to the category average of 17.34%. 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 1.04, so it is likely going to be more volatile than the market at large. 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. OTCFX has generated a negative alpha over the past five years of -4.89, 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, OTCFX is a no load fund. It has an expense ratio of 0.90% compared to the category average of 1.01%. Looking at the fund from a cost perspective, OTCFX 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.
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 Small Cap Stock Fund ( OTCFX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Small Cap Stock Fund ( OTCFX ) looks like a somewhat average choice for investors right now.
This could just be the start of your research on OTCFXin the Small Cap Blend 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. 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.