If you've been stuck searching for Allocation Balanced funds, consider T. Rowe Price Balanced Fund (RPBAX - Free Report) as a possibility. RPBAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
The world of Zacks' Allocation Balanced funds is an area filled with options, such as RPBAX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
RPBAX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Balanced Fund debuted in December of 1939. Since then, RPBAX has accumulated assets of about $3.40 billion, according to the most recently available information. Charles M. Shriver is the fund's current manager and has held that role since May of 2011.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 6.5%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.02%, 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 7.92%, the standard deviation of RPBAX over the past three years is 6.95%. The fund's standard deviation over the past 5 years is 7.48% compared to the category average of 8.34%. 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 the most recent bear market, RPBAX lost 37.76% and underperformed its peer group by 1.38%. 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 0.63, so it is likely going to be less 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. RPBAX has generated a negative alpha over the past five years of -0.66, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, RPBAX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 0.89%. From a cost perspective, RPBAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, T. Rowe Price Balanced Fund ( RPBAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
This could just be the start of your research on RPBAXin the Allocation Balanced 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.