Is T. Rowe Price Mid-Cap Growth Fd (RPMGX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mid Cap Growth fund could think about starting with T. Rowe Price Mid-Cap Growth Fund RPMGX. RPMGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
RPMGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
RPMGX 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 Fd made its debut in June of 1992, RPMGX has garnered more than $23.88 billion in assets. Brian W. H. Berghuis is the fund's current manager and has held that role since June of 1992.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 17.43%, 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 12.89%, 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. The standard deviation of RPMGX over the past three years is 10.8% compared to the category average of 9.37%. Looking at the past 5 years, the fund's standard deviation is 10.5% compared to the category average of 11.45%. This makes the fund less 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 RPMGX's case, the fund lost 48.23% in the most recent bear market and outperformed its peer group by 3.12%. This might suggest that the fund is a better choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 0.98, so investors should note that it is hypothetically as volatile as 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. RPMGX has generated a positive alpha over the past five years of 2.38, demonstrating 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.
This fund is currently holding about 92.73% stock in stocks, with an average market capitalization of $13.92 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Other
Industrial Cyclical
Turnover is 24%, which means, on average, the fund makes fewer trades than comparable funds.
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, RPMGX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.22%. From a cost perspective, RPMGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, T. Rowe Price Mid-Cap Growth Fd RPMGX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Mid-Cap Growth Fd looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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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