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Is T. Rowe Price Media & Telecomm (PRMTX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Sector - Tech fund category, T. Rowe Price Media & Telecomm (PRMTX - Free Report) could be a potential option. PRMTX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that PRMTX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
PRMTX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Media & Telecomm debuted in July of 1997. Since then, PRMTX has accumulated assets of about $4.48 billion, according to the most recently available information. The fund's current manager, Paul D. Greene, has been in charge of the fund since May of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.99%, 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 18.52%, 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 13.14%, the standard deviation of PRMTX over the past three years is 14.69%. Over the past 5 years, the standard deviation of the fund is 14.56% compared to the category average of 13.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In PRMTX's case, the fund lost 53.96% in the most recent bear market and underperformed comparable funds by 1%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.06, so investors should note that it is hypothetically 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. With a positive alpha of 2.99, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
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 primarily on equities that are traded in the United States.
The mutual fund currently has 90.18% of its holdings in stocks, with an average market capitalization of $207.41 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Non-Durable
Turnover is 6.9%, which means, on average, the fund makes fewer trades than the average comparable fund.
Expenses
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, PRMTX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.30%. From a cost perspective, PRMTX 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 Media & Telecomm ( PRMTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Media & Telecomm ( PRMTX ) looks like a good potential choice for investors right now.
Your research on the Sector - Tech 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is T. Rowe Price Media & Telecomm (PRMTX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Tech fund category, T. Rowe Price Media & Telecomm (PRMTX - Free Report) could be a potential option. PRMTX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that PRMTX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
PRMTX finds itself in the T. Rowe Price family, based out of Baltimore, MD. T. Rowe Price Media & Telecomm debuted in July of 1997. Since then, PRMTX has accumulated assets of about $4.48 billion, according to the most recently available information. The fund's current manager, Paul D. Greene, has been in charge of the fund since May of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.99%, 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 18.52%, 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 13.14%, the standard deviation of PRMTX over the past three years is 14.69%. Over the past 5 years, the standard deviation of the fund is 14.56% compared to the category average of 13.14%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In PRMTX's case, the fund lost 53.96% in the most recent bear market and underperformed comparable funds by 1%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.06, so investors should note that it is hypothetically 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. With a positive alpha of 2.99, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
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 primarily on equities that are traded in the United States.
The mutual fund currently has 90.18% of its holdings in stocks, with an average market capitalization of $207.41 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Non-Durable
Turnover is 6.9%, which means, on average, the fund makes fewer trades than the average comparable fund.Expenses
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, PRMTX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.30%. From a cost perspective, PRMTX 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 Media & Telecomm ( PRMTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Media & Telecomm ( PRMTX ) looks like a good potential choice for investors right now.
Your research on the Sector - Tech 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.