If you're looking for a Large Cap Value fund category, then a potential option is T. Rowe Price Value Fund (TRVLX). TRVLX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
TRVLX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
TRVLX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price Value Fund made its debut in September of 1994, and since then, TRVLX has accumulated about $19.89 billion in assets, per the most up-to-date date available. The fund's current manager, Mark S. Finn, has been in charge of the fund since December of 2009.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.18%, 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 11.51%, 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. Compared to the category average of 9.34%, the standard deviation of TRVLX over the past three years is 9.54%. Looking at the past 5 years, the fund's standard deviation is 9.69% compared to the category average of 9.06%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In TRVLX's case, the fund lost 54.32% in the most recent bear market and outperformed its peer group by 4.01%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.97, which means it is hypothetically as volatile as 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. The fund has produced a negative alpha over the past 5 years of -2.57, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, TRVLX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.03%. TRVLX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, T. Rowe Price Value Fund ( TRVLX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on the Large Cap Value 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 TRVLX too 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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