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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
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Mutual Fund Equity Report fund seekers should consider taking a look at T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) . PREFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various 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 PREFX. T. Rowe Price Tax-Efficient Equity debuted in December of 2000. Since then, PREFX has accumulated assets of about $250.73 million, according to the most recently available information. Donald J. Peters is the fund's current manager and has held that role since December of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 11.02%, and is in the middle 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 9.11%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. PREFX's standard deviation over the past three years is 20.92% compared to the category average of 17.93%. Looking at the past 5 years, the fund's standard deviation is 21.29% compared to the category average of 18.22%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.09, so investors should note that it is hypothetically more 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. The fund has produced a negative alpha over the past 5 years of -0.41, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Currently, this mutual fund is holding 98.74% in stocks, which have an average market capitalization of $287.02 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
With turnover at about 21.2%, this fund is making fewer trades than the average comparable fund.
Expenses
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, PREFX is a no load fund. It has an expense ratio of 0.85% compared to the category average of 0.99%. PREFX is actually cheaper than its peers when you consider factors like cost.
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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Tax-Efficient Equity ( PREFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
Mutual Fund Equity Report fund seekers should consider taking a look at T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) . PREFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various 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 PREFX. T. Rowe Price Tax-Efficient Equity debuted in December of 2000. Since then, PREFX has accumulated assets of about $250.73 million, according to the most recently available information. Donald J. Peters is the fund's current manager and has held that role since December of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 11.02%, and is in the middle 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 9.11%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. PREFX's standard deviation over the past three years is 20.92% compared to the category average of 17.93%. Looking at the past 5 years, the fund's standard deviation is 21.29% compared to the category average of 18.22%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.09, so investors should note that it is hypothetically more 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. The fund has produced a negative alpha over the past 5 years of -0.41, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Currently, this mutual fund is holding 98.74% in stocks, which have an average market capitalization of $287.02 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
With turnover at about 21.2%, this fund is making fewer trades than the average comparable fund.Expenses
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, PREFX is a no load fund. It has an expense ratio of 0.85% compared to the category average of 0.99%. PREFX is actually cheaper than its peers when you consider factors like cost.
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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Tax-Efficient Equity ( PREFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.