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Is T. Rowe Price Spectrum Diversified Equity (PRSGX) a Strong Mutual Fund Pick Right Now?
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Have you been searching for a Allocation Balanced fund? You might want to begin with T. Rowe Price Spectrum Diversified Equity (PRSGX - Free Report) . PRSGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as PRSGX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
T. Rowe Price is responsible for PRSGX, and the company is based out of Baltimore, MD. T. Rowe Price Spectrum Diversified Equity debuted in June of 1990. Since then, PRSGX has accumulated assets of about $1.91 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 11.94%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.02%, 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. PRSGX's standard deviation over the past three years is 14.52% compared to the category average of 15.26%. Looking at the past 5 years, the fund's standard deviation is 15.34% compared to the category average of 14.81%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.93, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. PRSGX's 5-year performance has produced a negative alpha of -2.62, 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 principally on equities that are traded in the United States.
This fund is currently holding about 88.11% in stocks and it has a negligible amount of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
Finance
With turnover at about 26.1%, this fund is making fewer trades than the average comparable fund.
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, PRSGX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 0.83%. So, PRSGX 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Spectrum Diversified Equity ( PRSGX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
This could just be the start of your research on PRSGX in the Allocation Balanced 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is T. Rowe Price Spectrum Diversified Equity (PRSGX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Allocation Balanced fund? You might want to begin with T. Rowe Price Spectrum Diversified Equity (PRSGX - Free Report) . PRSGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as PRSGX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
T. Rowe Price is responsible for PRSGX, and the company is based out of Baltimore, MD. T. Rowe Price Spectrum Diversified Equity debuted in June of 1990. Since then, PRSGX has accumulated assets of about $1.91 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 11.94%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.02%, 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. PRSGX's standard deviation over the past three years is 14.52% compared to the category average of 15.26%. Looking at the past 5 years, the fund's standard deviation is 15.34% compared to the category average of 14.81%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.93, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. PRSGX's 5-year performance has produced a negative alpha of -2.62, 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 principally on equities that are traded in the United States.
This fund is currently holding about 88.11% in stocks and it has a negligible amount of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
With turnover at about 26.1%, this fund is making fewer trades than the average comparable fund.
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, PRSGX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 0.83%. So, PRSGX 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Spectrum Diversified Equity ( PRSGX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
This could just be the start of your research on PRSGX in the Allocation Balanced 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.