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Is T. Rowe Price Dividend Growth Fund (PRDGX) a Strong Mutual Fund Pick Right Now?
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Large Cap Blend fund seekers should consider taking a look at T. Rowe Price Dividend Growth Fund (PRDGX - Free Report) . PRDGX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that PRDGX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a 'buy and hold' mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRDGX. T. Rowe Price Dividend Growth Fund debuted in December of 1992. Since then, PRDGX has accumulated assets of about $12.19 billion, according to the most recently available information. The fund is currently managed by Thomas J. Huber who has been in charge of the fund since March of 2000.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.84%, 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 14.3%, 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. Over the past three years, PRDGX's standard deviation comes in at 10.52%, compared to the category average of 11.4%. The fund's standard deviation over the past 5 years is 13.33% compared to the category average of 13.5%. This makes the fund less 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. PRDGX has a 5-year beta of 0.79, which means it is likely to be less volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -1.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PRDGX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.88%. PRDGX 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Dividend Growth Fund ( PRDGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Dividend Growth Fund ( PRDGX ) looks like a great potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PRDGX too 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.
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Is T. Rowe Price Dividend Growth Fund (PRDGX) a Strong Mutual Fund Pick Right Now?
Large Cap Blend fund seekers should consider taking a look at T. Rowe Price Dividend Growth Fund (PRDGX - Free Report) . PRDGX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that PRDGX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a 'buy and hold' mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRDGX. T. Rowe Price Dividend Growth Fund debuted in December of 1992. Since then, PRDGX has accumulated assets of about $12.19 billion, according to the most recently available information. The fund is currently managed by Thomas J. Huber who has been in charge of the fund since March of 2000.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.84%, 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 14.3%, 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. Over the past three years, PRDGX's standard deviation comes in at 10.52%, compared to the category average of 11.4%. The fund's standard deviation over the past 5 years is 13.33% compared to the category average of 13.5%. This makes the fund less 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. PRDGX has a 5-year beta of 0.79, which means it is likely to be less volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -1.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PRDGX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.88%. PRDGX 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Dividend Growth Fund ( PRDGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, T. Rowe Price Dividend Growth Fund ( PRDGX ) looks like a great potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PRDGX too 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.