If you have been looking for Sector - Finance funds, a place to start could be T. Rowe Price Financial Services (PRISX - Free Report) . PRISX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
PRISX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.
History of Fund/Manager
PRISX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price Financial Services made its debut in September of 1996, and since then, PRISX has accumulated about $814.68 million in assets, per the most up-to-date date available. Gabriel Solomon is the fund's current manager and has held that role since April of 2014.
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 9.04%, 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 17.75%, 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 16.83%, the standard deviation of PRISX over the past three years is 14.3%. Over the past 5 years, the standard deviation of the fund is 14.48% compared to the category average of 15.29%. This makes the fund less 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. In PRISX's case, the fund lost 59.27% in the most recent bear market and outperformed its peer group by 2.23%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.07, 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. PRISX's 5-year performance has produced a negative alpha of -1.72, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Exploring 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 principally on equities that are traded in the United States.
Right now, 89.09% of this mutual fund's holdings are stocks, which have an average market capitalization of $77.24 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 43.6%, this fund is making fewer trades than its comparable peers.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, PRISX is a no load fund. It has an expense ratio of 0.84% compared to the category average of 1.42%. Looking at the fund from a cost perspective, PRISX 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.
Overall, T. Rowe Price Financial Services ( PRISX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
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