If you have been looking for Mid Cap Growth funds, a place to start could be T. Rowe Price Mid-Cap Growth Adviser (
PAMCX Quick Quote PAMCX - Free Report) . PAMCX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance. Objective
Zacks categorizes PAMCX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts impressive sales and/or earnings growth.
History of Fund/Manager
PAMCX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. Since T. Rowe Price Mid-Cap Growth Adviser made its debut in June of 1992, PAMCX has garnered more than $779 million in assets. Brian W. H. Berghuis is the fund's current manager and has held that role since June of 1992.
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 8.48%, and it sits in the middle 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 8.66%, which places it in the middle 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. PAMCX's standard deviation over the past three years is 18.88% compared to the category average of 14.02%. Over the past 5 years, the standard deviation of the fund is 16.37% compared to the category average of 12.76%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In PAMCX's case, the fund lost 48.36% in the most recent bear market and outperformed its peer group by 3%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PAMCX has a 5-year beta of 1.07, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -0.91. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 78.31% of its assets in stocks, with an average market capitalization of $19.92 billion. The fund has the heaviest exposure to the following market sectors:
Technology Other Industrial Cyclical
Turnover is 22.8%, which means this fund makes fewer trades than the average comparable fund.
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, PAMCX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.20%. PAMCX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Overall, T. Rowe Price Mid-Cap Growth Adviser ( PAMCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Mid Cap Growth area of the mutual fund world, make sure to check out
www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PAMCX too 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.