Markets

Is T. Rowe Price Mid-Cap Value Fund (TRMCX) a Strong Mutual Fund Pick Right Now?

An image of a pencil and a calculator
Credit: Shutterstock photo

If investors are looking at the Mid Cap Value fund category, T. Rowe Price Mid-Cap Value Fund (TRMCX) could be a potential option. TRMCX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

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 is a part of the T. Rowe Price family of funds, a company 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 $10.67 billion in assets, as of the most recently available information. David J. Wallack is the fund's current manager and has held that role since December of 2000.

Performance

Of course, investors look for strong performance in funds. TRMCX has a 5-year annualized total return of 11.1% 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 14.42%, 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 9.39%, the standard deviation of TRMCX over the past three years is 9.66%. Looking at the past 5 years, the fund's standard deviation is 9.75% compared to the category average of 9.19%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In TRMCX's case, the fund lost 47.46% in the most recent bear market and underperformed comparable funds by 3.95%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 0.86, the fund is likely to be less volatile than the market average. 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. TRMCX has generated a negative alpha over the past five years of -0.72, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, TRMCX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.19%. TRMCX 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.

Bottom Line

Overall, T. Rowe Price Mid-Cap Value Fund ( TRMCX ) 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.

Don't stop here for your research on Mid Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TRMCX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Get Your Free (TRMCX): Fund Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TRMCX

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More