Is T. Rowe Price Tax-Efficient Equity (PREFX) a Strong Mutual Fund Pick Right Now?
Mutual Fund Report for PREFX
Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with T. Rowe Price Tax-Efficient Equity (PREFX). PREFX carries 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
PREFX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. The T. Rowe Price Tax-Efficient Equity made its debut in December of 2000 and PREFX has managed to accumulate roughly $705.56 million in assets, as of the most recently available information. The fund's current manager, Donald J. Peters, has been in charge of the fund since December of 2000.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 23.41%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 26.69%, which places it in the middle 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. The standard deviation of PREFX over the past three years is 20.19% compared to the category average of 17.27%. Over the past 5 years, the standard deviation of the fund is 16.97% compared to the category average of 14.7%. 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 1.05, which means it is hypothetically more volatile than 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. The fund has produced a positive alpha over the past 5 years of 4.06, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
This fund is currently holding about 85.93% stock in stocks, with an average market capitalization of $385.84 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
Turnover is 25.7%, which means this fund makes fewer trades than its comparable peers.
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 0.75% compared to the category average of 1.01%. Looking at the fund from a cost perspective, PREFX is actually cheaper than its peers.
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.
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, T. Rowe Price Tax-Efficient Equity ( PREFX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report 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 PREFX to its peers as well 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.
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