There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Institutional Large Cap Growth (TRLGX - Free Report) . TRLGX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
TRLGX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of TRLGX. T. Rowe Price Institutional Large Cap Growth debuted in October of 2001. Since then, TRLGX has accumulated assets of about $18.33 billion, according to the most recently available information. Taymour R. Tamaddon is the fund's current manager and has held that role since January of 2017.
Of course, investors look for strong performance in funds. TRLGX has a 5-year annualized total return of 13.84% 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 23.53%, 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 13.01%, the standard deviation of TRLGX over the past three years is 13.15%. Over the past 5 years, the standard deviation of the fund is 13.74% compared to the category average of 12.62%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. TRLGX lost 48.82% in the most recent bear market and outperformed its peer group by 0.03%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.08, which means it is hypothetically more volatile than the market at large. 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. TRLGX's 5-year performance has produced a positive alpha of 2.4, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Investigating 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.
This fund is currently holding about 86.43% stock in stocks, which have an average market capitalization of $274.61 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
With turnover at about 32.8%, this fund makes 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, TRLGX is a no load fund. It has an expense ratio of 0.56% compared to the category average of 1.05%. From a cost perspective, TRLGX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.
Overall, T. Rowe Price Institutional Large Cap Growth ( TRLGX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.