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Is T. Rowe Price New America Growth (PRWAX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Large Cap Growth fund could think about starting with T. Rowe Price New America Growth (PRWAX - Free Report) . PRWAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PRWAX 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
PRWAX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price New America Growth made its debut in September of 1985, and since then, PRWAX has accumulated about $3.87 billion in assets, per the most up-to-date date available. The fund is currently managed by Justin P. White who has been in charge of the fund since April of 2016.
Performance
Investors naturally seek funds with strong performance. PRWAX has a 5-year annualized total return of 16.43% and is 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 21.25%, 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 PRWAX over the past three years is 12.49% compared to the category average of 9.76%. The fund's standard deviation over the past 5 years is 12.21% compared to the category average of 9.44%. 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 PRWAX's case, the fund lost 45.49% in the most recent bear market and underperformed its peer group by 3.48%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.13, so it is likely going to be more volatile than 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. The fund has produced a positive alpha over the past 5 years of 0.82, which shows 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 largely on equities that are traded in the United States.
Right now, 94.14% of this mutual fund's holdings are stocks, with an average market capitalization of $265.84 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
With turnover at about 72%, this fund makes more trades per year than the comparable average.
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, PRWAX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.10%. From a cost perspective, PRWAX 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 New America Growth ( PRWAX ) 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.
Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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 New America Growth (PRWAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Growth fund could think about starting with T. Rowe Price New America Growth (PRWAX - Free Report) . PRWAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify PRWAX 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
PRWAX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price New America Growth made its debut in September of 1985, and since then, PRWAX has accumulated about $3.87 billion in assets, per the most up-to-date date available. The fund is currently managed by Justin P. White who has been in charge of the fund since April of 2016.
Performance
Investors naturally seek funds with strong performance. PRWAX has a 5-year annualized total return of 16.43% and is 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 21.25%, 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 PRWAX over the past three years is 12.49% compared to the category average of 9.76%. The fund's standard deviation over the past 5 years is 12.21% compared to the category average of 9.44%. 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 PRWAX's case, the fund lost 45.49% in the most recent bear market and underperformed its peer group by 3.48%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.13, so it is likely going to be more volatile than 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. The fund has produced a positive alpha over the past 5 years of 0.82, which shows 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 largely on equities that are traded in the United States.
Right now, 94.14% of this mutual fund's holdings are stocks, with an average market capitalization of $265.84 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
With turnover at about 72%, this fund makes more trades per year than the comparable average.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, PRWAX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.10%. From a cost perspective, PRWAX 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 New America Growth ( PRWAX ) 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.
Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.