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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Large Cap Growth fund? Starting with T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) is one possibility. PREFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
PREFX finds itself in the T. Rowe Price family, based out of Baltimore, MD. Since T. Rowe Price Tax-Efficient Equity made its debut in December of 2000, PREFX has garnered more than $300.54 million in assets. Donald J. Peters 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. PREFX has a 5-year annualized total return of 16.46% 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 5.18%, 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 20.5% compared to the category average of 17.6%. Looking at the past 5 years, the fund's standard deviation is 21.13% compared to the category average of 18.27%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.09, which means 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. With a negative alpha of -0.09, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 largely on equities that are traded in the United States.
The mutual fund currently has 78.7% of its holdings in stocks, which have an average market capitalization of $471.02 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 its comparable peers.
Expenses
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, PREFX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 0.95%. PREFX 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.
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 the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PREFX too 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.
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Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Growth fund? Starting with T. Rowe Price Tax-Efficient Equity (PREFX - Free Report) is one possibility. PREFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
PREFX finds itself in the T. Rowe Price family, based out of Baltimore, MD. Since T. Rowe Price Tax-Efficient Equity made its debut in December of 2000, PREFX has garnered more than $300.54 million in assets. Donald J. Peters 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. PREFX has a 5-year annualized total return of 16.46% 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 5.18%, 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 20.5% compared to the category average of 17.6%. Looking at the past 5 years, the fund's standard deviation is 21.13% compared to the category average of 18.27%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.09, which means 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. With a negative alpha of -0.09, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 largely on equities that are traded in the United States.
The mutual fund currently has 78.7% of its holdings in stocks, which have an average market capitalization of $471.02 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 its comparable peers.Expenses
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, PREFX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 0.95%. PREFX 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.
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 the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PREFX too 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.