In the first quarter, publicly owned investment management firm, T. Rowe Price Group, Inc. (TROW - Free Report) attracted around $700 million in investments and sustained the trend even in the second quarter. It reported strong earnings results on the back of gains in investment advisory revenues earned from T. Rowe Price mutual funds.
Also, the company posted stable growth in its assets under management (AUM) in the second quarter and maintained the momentum in July. Steady inflows in its mutual funds and the ability to offer low cost mutual funds continuously make mutual funds from T. Rowe wise investment choices.
T. Rowe Price’s Performance in 1H17
In the second quarter, T. Rowe Price reported earnings per share (EPS) of $1.28, which improved 15.3% from the year-ago figure. Additionally, net revenue rose 12.1% to $1.17 billion from the year-ago quarter. The rise was prompted mainly by higher investment advisory fees that grew 13.4% year over year to $1.04 billion. Both second-quarter EPS and revenues improved from $1.18 and $1.11 billion, respectively, in the prior-year quarter.
Further, investment advisory revenues earned from the T. Rowe Price mutual funds, distributed in the U.S., were up 12.7% year over year to $754.3 million. Investment advisory revenues earned from other investment portfolios, managed by the company, rose 15.1% from the prior-year quarter to $289.6 million. (Read More: T. Rowe Price's Q2 Earnings Beat, Costs Escalate)
As of Jun 30, 2017, total AUM climbed 16.4% year over year to $903.6 billion. During the quarter, net market appreciation and income came in at $38.3 billion, while net cash inflow was $3.7 billion after client transfers. Further, the company announced preliminary assets under management (AUM) of $927 billion for July, indicating an increase of 2.5% from June’s figure. The company is expected to witness strong growth in its AUM and investment advisory revenues even in the second half.
T. Rowe Price Funds at a Glance
T. Rowe Price is a renowned mutual fund family focused on fulfilling the needs of its investors. The fund family is set to maintain its strong first-half performance even in this half on the back of effective investment approach, low expenses and strong investment objective guidance. In its recent global economic outlook, T. Rowe focused on global and domestic equity funds as well as emerging markets and global fixed income bond funds.
At present, the fund family is providing 129 no-load mutual funds, which include 54 stock funds, 36 bond funds, 34 asset allocation funds, 26 target date funds and 8 money market funds. Also, T. Rowe Price claims that more than 85% of its mutual funds provide better returns than its Lipper peer group average for a 10-year period.
Buy These 5 Best-Ranked T. Rowe Mutual Funds
Low costs and strong returns led T. Rowe Price mutual funds to grab investor attention during the first half. In this context, we have selected five mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). These funds have encouraging first half and year-to-date (YTD) returns. Also, these funds have low expense ratios and minimum initial investment within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
T. Rowe Price Small-Cap Value Advisor (PASVX - Free Report) seeks capital appreciation over the long run. PASVX invests the lion’s share of its assets in securities of companies with market capitalization similar to those listed on the Russell 2000 Index. Also, it may consider securities of non-U.S. companies for potential investment.
PASVX has YTD and first-half returns of 2.4% and 3.5%, respectively, and an expense ratio of 1.15% compared with the category average of 1.24%.
T. Rowe Price Growth & Income (PRGIX - Free Report) seeks long-term growth of capital and income. PRGIX mainly focuses on capital growth by investing in common stocks of domestic companies as well as foreign entities. The fund may sell securities for reasons like limiting losses and securing gains.
PRGIX has YTD and first-half returns of 13% and 10.8%, respectively, and an expense ratio of 0.67% compared with the category average of 0.99%.
T. Rowe Price Science & Technology Advisor (PASTX - Free Report) invests the majority of its net assets in the common stocks of companies expected to benefit from the development and use of science and/or technology. PASTX invests in both U.S. and non-U.S. companies. The fund seeks growth of capital for the long run.
PASTX has YTD and first-half returns of 24.8% and 20.9%, respectively, and an expense ratio of 1.06% compared with the category average of 1.46%.
T. Rowe Price Financial Services (PRISX - Free Report) seeks both capital growth and current income. The majority of its assets are invested in companies in the financial services sector. It may also purchase securities of companies involved in providing financial software. The fund uses fundamental bottom-up analysis in order to select securities.
PRISX has YTD and first-half returns of 9.5% and 8.1%, respectively, and an expense ratio of 0.88% compared with the category average of 1.42%.
T. Rowe Price European Stock (PRESX - Free Report) seeks long-term capital appreciation. PRESX invests a major portion of its assets in companies that are located in Europe or whose operations are related to this region. PRESX generally invests in common stocks of companies irrespective of their market capitalization.
PRESX has YTD and first-half returns of 20.2% and 18.2%, respectively, and an expense ratio of 0.96% compared with the category average of 1.55%.
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