Value Added

Here's a midcap fund that's more than just middle of the road.
Magazine Contributor
2 min read

This story appears in the November 2003 issue of Entrepreneur. Subscribe »

No matter how you slice it, buying low and selling high is how the big guns on Wall Street make their money. When it comes to mutual funds, the same is true- if the fund has a value bent.

David Wallack, portfolio manager of the T. Rowe Price Mid-Cap Value Fund (TRMCX), understands market challenges. His grasp of downside risk- upside potential- rewarded fund shareholders: Over the past three years, ending July 31, the fund's average annual total return was 13.09 percent, according to Lipper. In addition, it's garnered four out of five possible Lipper Leaders checks, scoring it tops in total return, consistent returns, preservation of capital and expenses.

Wallack defines midcap companies as those having a market capitalization of between $1 billion and $12 billion, and he typically keeps between 80 and 120 stocks in the fund's portfolio. Using a bottom-up approach to investing, one of this year's new buys was Kmart; one of its discards, Tupperware.

As with all equity funds, there are risks to investing in the T. Rowe Price Mid-Cap Value Fund. Earnings on midcap stocks can fluctuate more than those on large-caps, and value investing has its cycles. "The biggest risk is that we tend to lag in an aggressive bull market," says Wallack. "But over multiple years, you have to keep what you earn to have decent returns. And that's what I try to do."


Dian Vujovich is an author, syndicated columnist and publisher of fund investing site www.fundfreebies.com.

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