Have you been searching for a Large Cap Value fund? You might want to begin with T. Rowe Price Growth & Income . PRGIX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
PRGIX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. Since T. Rowe Price Growth & Income made its debut in December of 1982, PRGIX has garnered more than $1.89 billion in assets. Jeffrey Rottinghaus is the fund's current manager and has held that role since June of 2015.
Performance
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 12.98%, and it sits in the top 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 9.94%, 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 10.71%, the standard deviation of PRGIX over the past three years is 9.64%. The standard deviation of the fund over the past 5 years is 9.55% compared to the category average of 10.28%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
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 PRGIX's case, the fund lost 47.79% in the most recent bear market and outperformed its peer group by 2.45%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.93, the fund is likely to be less volatile than 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. Over the past 5 years, the fund has a positive alpha of 0.53. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
Right now, 96.26% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $182.85 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
Turnover is 64.9%, which means, on average, the fund makes more trades in a given year than the average of comparable funds.
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, PRGIX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.03%. From a cost perspective, PRGIX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price Growth & Income has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
This could just be the start of your research on PRGIX in the Large Cap Value 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is T. Rowe Price Growth & Income (PRGIX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Large Cap Value fund? You might want to begin with T. Rowe Price Growth & Income . PRGIX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
PRGIX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. Since T. Rowe Price Growth & Income made its debut in December of 1982, PRGIX has garnered more than $1.89 billion in assets. Jeffrey Rottinghaus is the fund's current manager and has held that role since June of 2015.
Performance
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 12.98%, and it sits in the top 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 9.94%, 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 10.71%, the standard deviation of PRGIX over the past three years is 9.64%. The standard deviation of the fund over the past 5 years is 9.55% compared to the category average of 10.28%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
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 PRGIX's case, the fund lost 47.79% in the most recent bear market and outperformed its peer group by 2.45%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.93, the fund is likely to be less volatile than 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. Over the past 5 years, the fund has a positive alpha of 0.53. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
Right now, 96.26% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $182.85 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 64.9%, which means, on average, the fund makes more trades in a given year than the average of comparable funds.
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, PRGIX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.03%. From a cost perspective, PRGIX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price Growth & Income has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
This could just be the start of your research on PRGIX in the Large Cap Value 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.