Any investors hoping to find a Mid Cap Growth fund could think about starting with T. Rowe Price Mid-Cap Growth Fd (
RPMGX Quick Quote RPMGX - Free Report) . RPMGX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance. Objective
We note that RPMGX 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 RPMGX. T. Rowe Price Mid-Cap Growth Fd debuted in June of 1992. Since then, RPMGX has accumulated assets of about $23.88 billion, according to the most recently available information. The fund's current manager, Brian W. H. Berghuis, has been in charge of the fund since June of 1992.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 17.43%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 12.89%, which places it in the top third during this time-frame.
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 9.37%, the standard deviation of RPMGX over the past three years is 10.8%. The fund's standard deviation over the past 5 years is 10.5% compared to the category average of 11.45%. This makes the fund less volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In RPMGX's case, the fund lost 48.23% in the most recent bear market and outperformed its peer group by 3.12%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.98, so it is likely going to be as volatile as 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. Over the past 5 years, the fund has a positive alpha of 2.38. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 92.73% stock in stocks, and these companies have an average market capitalization of $13.92 billion. The fund has the heaviest exposure to the following market sectors:
Technology Other Industrial Cyclical
Turnover is about 24%, so those in charge of the fund make fewer trades than comparable funds.
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, RPMGX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.22%. RPMGX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, T. Rowe Price Mid-Cap Growth Fd has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on RPMGX in the Mid Cap Growth 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 want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.