Any investors hoping to find a Large Cap Value fund could think about starting with T. Rowe Price Value Fd TRVLX . TRVLX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of TRVLX. T. Rowe Price Value Fd debuted in September of 1994. Since then, TRVLX has accumulated assets of about $21.21 billion, according to the most recently available information. Mark S. Finn is the fund's current manager and has held that role since December of 2009.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 14.88%, 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 8.84%, 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 9.29%, the standard deviation of TRVLX over the past three years is 10.32%. The fund's standard deviation over the past 5 years is 9.96% compared to the category average of 9.89%. 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. In the most recent bear market, TRVLX lost 54.32% and underperformed comparable funds by 4.2%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.02, so investors should note that 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. TRVLX's 5-year performance has produced a negative alpha of -0.53, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining 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.
Right now, 98.68% of this mutual fund's holdings are stocks, which have an average market capitalization of $114.07 billion. The fund has the heaviest exposure to the following market sectors:
This fund's turnover is about 91%, so the fund managers are making more trades in a given year than the category average.
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, TRVLX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.05%. So, TRVLX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, T. Rowe Price Value Fd 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.
For additional information on this product, or to compare it to other mutual funds in the Large 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.