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Is T. Rowe Price Institutional Large Cap Growth (TRLGX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

Having trouble finding a Large Cap Growth fund? T. Rowe Price Institutional Large Cap Growth (TRLGX) is a potential starting point. TRLGX 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 classify TRLGX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.

History of Fund/Manager

TRLGX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. The T. Rowe Price Institutional Large Cap Growth made its debut in October of 2001 and TRLGX has managed to accumulate roughly $16.11 billion in assets, as of the most recently available information. Taymour R. Tamaddon is the fund's current manager and has held that role since January of 2017.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 14.5%, and it sits 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 20.4%, 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 13.54%, the standard deviation of TRLGX over the past three years is 13.56%. The fund's standard deviation over the past 5 years is 13.9% compared to the category average of 13.3%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, TRLGX lost 48.81% and outperformed its peer group by 0%. This means that the fund could possibly be an on par choice than its peers during a down 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. TRLGX has a 5-year beta of 1.06, which means it is likely to be more volatile than the market average. 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. With a positive alpha of 3.71, 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.

This fund is currently holding about 95.79% stock in stocks, with an average market capitalization of $287.84 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
  3. Finance

With turnover at about 33.4%, this fund makes fewer trades than its comparable peers.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, TRLGX is a no load fund. It has an expense ratio of 0.56% compared to the category average of 1.05%. TRLGX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.

Bottom Line

Overall, T. Rowe Price Institutional Large Cap Growth ( TRLGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about TRLGX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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