Is T. Rowe Price Mid-Cap Growth Adviser (PAMCX) a Strong Mutual Fund Pick Right Now?
If you’ve been stuck searching for Mid Cap Growth funds, consider T. Rowe Price Mid-Cap Growth Adviser (PAMCX) as a possibility. PAMCX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
We note that PAMCX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks–usually companies with a market cap between $2 billion and $10 billion–that demonstrate extensive growth opportunities for investors compared to their peers.
T. Rowe Price is responsible for PAMCX, and the company is based out of Baltimore, MD. Since T. Rowe Price Mid-Cap Growth Adviser made its debut in June of 1992, PAMCX has garnered more than $171.00 million in assets. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.79%, and is in the middle 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 13.22%, which places it in the bottom 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. The standard deviation of PAMCX over the past three years is 15.82% compared to the category average of 13.28%. Over the past 5 years, the standard deviation of the fund is 17.09% compared to the category average of 14.73%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.01, which means it is hypothetically as volatile as the market at large. 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. Over the past 5 years, the fund has a negative alpha of -8.27. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PAMCX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 0.97%. From a cost perspective, PAMCX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, even with its comparatively similar performance, average downside risk, and higher fees, T. Rowe Price Mid-Cap Growth Adviser ( PAMCX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).