Small Cap Growth fund seekers should consider taking a look at T. Rowe Price New Horizons (PRNHX Quick QuotePRNHX - Free Report) . PRNHX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

PRNHX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.

History of Fund/Manager

PRNHX finds itself in the T. Rowe Price family, based out of Baltimore, MD. The T. Rowe Price New Horizons made its debut in June of 1960 and PRNHX has managed to accumulate roughly $8.90 billion in assets, as of the most recently available information. The fund's current manager, Joshua Spencer, has been in charge of the fund since March of 2019.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 6.72%, and is in the bottom 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 -0.21%, which places it in the bottom 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. The standard deviation of PRNHX over the past three years is 21.32% compared to the category average of 17.12%. Over the past 5 years, the standard deviation of the fund is 23.24% compared to the category average of 17.91%. 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. PRNHX has a 5-year beta of 1.03, which means it is likely to be as volatile as the market average. 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. With a negative alpha of -6.82, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, PRNHX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 0.98%. PRNHX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively weak performance, worse downside risk, and lower fees, T. Rowe Price New Horizons ( PRNHX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.