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Is T. Rowe Price Diversified Mid Cap Growth (PRDMX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Mid Cap Growth fund? T. Rowe Price Diversified Mid Cap Growth (PRDMX - Free Report) is a potential starting point. PRDMX holds 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 PRDMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
T. Rowe Price is responsible for PRDMX, and the company is based out of Baltimore, MD. The T. Rowe Price Diversified Mid Cap Growth made its debut in January of 2004 and PRDMX has managed to accumulate roughly $904 million in assets, as of the most recently available information. The fund's current manager, Donald J. Peters, has been in charge of the fund since January of 2004.
Performance
Investors naturally seek funds with strong performance. PRDMX has a 5-year annualized total return of 11.94% 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 15.87%, 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. Over the past three years, PRDMX's standard deviation comes in at 13.67%, compared to the category average of 14.11%. Looking at the past 5 years, the fund's standard deviation is 13.53% compared to the category average of 13.97%. This makes the fund less 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 the most recent bear market, PRDMX lost 51.81% and outperformed its peer group by 0%. This makes the fund a possibly on par choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.07, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 1.18. This means that 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 81.49% of its assets in stocks, with an average market capitalization of $17.56 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Services
With turnover at about 20.1%, this fund is making fewer trades than the average comparable fund.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRDMX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 1.18%. So, PRDMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price Diversified Mid Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Diversified Mid Cap Growth ( PRDMX ) looks like a good potential choice for investors right now.
This could just be the start of your research on PRDMXin the Mid Cap Growth 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.
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Is T. Rowe Price Diversified Mid Cap Growth (PRDMX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Mid Cap Growth fund? T. Rowe Price Diversified Mid Cap Growth (PRDMX - Free Report) is a potential starting point. PRDMX holds 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 PRDMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
T. Rowe Price is responsible for PRDMX, and the company is based out of Baltimore, MD. The T. Rowe Price Diversified Mid Cap Growth made its debut in January of 2004 and PRDMX has managed to accumulate roughly $904 million in assets, as of the most recently available information. The fund's current manager, Donald J. Peters, has been in charge of the fund since January of 2004.
Performance
Investors naturally seek funds with strong performance. PRDMX has a 5-year annualized total return of 11.94% 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 15.87%, 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. Over the past three years, PRDMX's standard deviation comes in at 13.67%, compared to the category average of 14.11%. Looking at the past 5 years, the fund's standard deviation is 13.53% compared to the category average of 13.97%. This makes the fund less 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 the most recent bear market, PRDMX lost 51.81% and outperformed its peer group by 0%. This makes the fund a possibly on par choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.07, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 1.18. This means that 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 81.49% of its assets in stocks, with an average market capitalization of $17.56 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Services
With turnover at about 20.1%, this fund is making fewer trades than the average comparable fund.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRDMX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 1.18%. So, PRDMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, T. Rowe Price Diversified Mid Cap Growth ( PRDMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Diversified Mid Cap Growth ( PRDMX ) looks like a good potential choice for investors right now.
This could just be the start of your research on PRDMXin the Mid Cap Growth 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.