There are plenty of choices in the All Cap Value category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Cap Appreciation PRWCX . PRWCX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
We classify PRWCX in the All Cap Value category, an area rife with potential choices. Like the name suggests, MUTUAL FUNDS invest in small, medium, and large-cap companies, though they end up focusing on bigger firms due to percentage of assets. These funds look for key value characteristics, targeting stocks that boast low P/E ratios, high dividend yields, and whose share prices do not reflect their worth.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PRWCX. The T. Rowe Price Cap Appreciation made its debut in June of 1986 and PRWCX has managed to accumulate roughly $25.88 billion in assets, as of the most recently available information. The fund's current manager, David R. Giroux, has been in charge of the fund since June of 2006.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 10.58%, 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 9.15%, 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 PRWCX over the past three years is 6.53% compared to the category average of 9.6%. The standard deviation of the fund over the past 5 years is 6.23% compared to the category average of 9.32%. This makes the fund less 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. PRWCX lost 36.16% in the most recent bear market and underperformed its peer group by 13.38%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.61, so it is likely going to be less volatile than the market at large. 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. PRWCX's 5-year performance has produced a positive alpha of 2.33, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, PRWCX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 1.17%. Looking at the fund from a cost perspective, PRWCX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Overall, T. Rowe Price Cap Appreciation has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Cap Appreciation looks like a good potential choice for investors right now.
Want even more information about PRWCX? 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. 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.