Mid Cap Value fund seekers should not consider taking a look at T. Rowe Price Mid-Cap Value Fund (TRMCX) at this time. TRMCX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
TRMCX is one of many Mid Cap Value mutual funds to choose from. Mid Cap Value funds usually invest in companies with a stock market valuation between $2 billion and $10 billion; these medium-sized firms possess strong value and income opportunities for investors.
History of Fund/Manager
TRMCX finds itself in the T. Rowe Price family, based out of Baltimore, MD. The T. Rowe Price Mid-Cap Value Fund made its debut in June of 1996 and TRMCX has managed to accumulate roughly $8.66 billion in assets, as of the most recently available information. The fund's current manager, David J. Wallack, has been in charge of the fund since December of 2000.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 7.47%, 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 8.36%, 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 9.92%, the standard deviation of TRMCX over the past three years is 11.01%. Over the past 5 years, the standard deviation of the fund is 11.36% compared to the category average of 10.24%. This makes the fund more volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. TRMCX lost 47.47% in the most recent bear market and outperformed its peer group by 4.09%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 0.89, so investors should note that it is hypothetically less volatile than 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 -2.61, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, TRMCX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.14%. Looking at the fund from a cost perspective, TRMCX is actually cheaper than its peers.
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.
Overall, T. Rowe Price Mid-Cap Value Fund ( TRMCX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Value, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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