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Is T. Rowe Price Blue Chip Growth Adviser (PABGX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Large Cap Growth fund? T. Rowe Price Blue Chip Growth Adviser (PABGX - Free Report) is a potential starting point. PABGX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PABGX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PABGX. Since T. Rowe Price Blue Chip Growth Adviser made its debut in June of 1993, PABGX has garnered more than $3.65 billion in assets. The fund is currently managed by Larry J. Puglia who has been in charge of the fund since June of 1993.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 18.07%, and is 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 15.74%, 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. The standard deviation of PABGX over the past three years is 13.34% compared to the category average of 9.5%. Over the past 5 years, the standard deviation of the fund is 12.55% compared to the category average of 9.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, PABGX lost 50.2% and underperformed comparable funds by 1.21%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more 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. PABGX's 5-year performance has produced a positive alpha of 3.65, which means 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 mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 98.3% stock in stocks, which have an average market capitalization of $256.65 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Turnover is 34.5%, which means this fund makes 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, PABGX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 1.11%. PABGX 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.
Bottom Line
Overall, T. Rowe Price Blue Chip Growth Adviser has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Blue Chip Growth Adviser looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth 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 PABGX 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 Blue Chip Growth Adviser (PABGX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Growth fund? T. Rowe Price Blue Chip Growth Adviser (PABGX - Free Report) is a potential starting point. PABGX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PABGX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PABGX. Since T. Rowe Price Blue Chip Growth Adviser made its debut in June of 1993, PABGX has garnered more than $3.65 billion in assets. The fund is currently managed by Larry J. Puglia who has been in charge of the fund since June of 1993.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 18.07%, and is 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 15.74%, 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. The standard deviation of PABGX over the past three years is 13.34% compared to the category average of 9.5%. Over the past 5 years, the standard deviation of the fund is 12.55% compared to the category average of 9.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, PABGX lost 50.2% and underperformed comparable funds by 1.21%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more 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. PABGX's 5-year performance has produced a positive alpha of 3.65, which means 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 mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 98.3% stock in stocks, which have an average market capitalization of $256.65 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 34.5%, which means this fund makes 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, PABGX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 1.11%. PABGX 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.
Bottom Line
Overall, T. Rowe Price Blue Chip Growth Adviser has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Blue Chip Growth Adviser looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth 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 PABGX 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.