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5 Top-Performing T. Rowe Mutual Funds of 2016

T. Rowe Price is a renowned mutual fund family focusing on fulfilling the needs of its investors with an effective investment approach, low expenses and strong objective guidance. In its recent global economic outlook, T. Rowe focused on global and domestic equity funds as well as emerging markets and global fixed income bond funds.

Moreover, the company launched a fixed income fund, T. Rowe Price Total Return Fund, in 2016. It aims to provide strong returns by investing primarily in debt securities, domestic securitized bonds and several other debt instruments.

During the first nine months of 2016, T. Rowe Price repurchased 8 million shares of its common stock for $546.9 million and utilized the available cash balance by investing $112.5 million in capitalized technology and facilities. For 2016, the company expects capital expenditures of approximately $165 million, comprising two-third for technology development.

T. Rowe Funds At a Glance

T. Rowe invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in the technology sector. Among the cyclical sectors, the fund family invests in financial services. The company has also gained from investing in defensive sectors.

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Technology Select Sector SPDR (XLK) climbed 26.1% in the last one-year period. Additionally, mutual funds related to this sector registered stable returns. According to Morningstar, the technology mutual fund registered a one-year return of 28.8%.

Additionally, FinancialsSelect Sector SPDR (XLF) jumped 33.1% in the last one year and was one of the biggest gainers among the S&P 500 sectors. Moreover, the financial mutual fund returned 32.6% in the past one-year period, according to Morningstar.

More About T. Rowe Funds

Founded in 1937 and headquartered in Baltimore, T. Rowe Price prides itself in having more than 6,000 employees, including 489 investment professionals across the world. Also, T. Rowe Price claims that more than 85% of its mutual funds carry a lower expense ratio than their respective categories.

This renowned publicly owned investment management firm offers a variety of mutual funds, sub-advisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The company operates worldwide from 16 offices in the U.S., England, Argentina, Australia, Hong Kong, Japan and Singapore. Recently, in Fortune Magazine’s “WORLD’S MOST ADMIRED COMPANIES” 2016 list, T. Rowe held the third rank.

As of Sep 30, 2016, total asset under management (AUM) increased 12% year over year to $812.9 billion. Additionally, net market appreciation and income, came in at $36.5 billion, while net cash outflow was only $0.2 billion after client transfers.

T. Rowe Price remains debt-free with substantial liquidity, including cash and sponsored portfolio investment holdings of about $2.1 billion as of Sep 30, 2016. This should help the company in making further investments.

Buy These 5 T. Rowe Mutual Funds

We have selected five mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). These funds have encouraging one-year annualized returns, which beat the one-year return of respective benchmark indexes. Also, these funds have low expense ratios and minimum initial investment within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

T. Rowe Price Small-Cap Value PRSVX invests the lion’s share of its assets in companies with market capitalization within the range of the Russell 2000 Index. PRSVX may also invest in securities of companies located in foreign lands. Further, PRSVX may choose to sell its securities to restrict losses and reallocate assets in other securities with better prospects.

PRSVX has an annual expense ratio of 0.80%, which is below the category average of 1.22%. The fund has one-year annualized return of 39.8%, which is better than Russell 2000 Index’s one-year return of 34.8%.

T. Rowe Price Mid-Cap Value TRMCX invests the majority of its assets in companies having market capitalization within the range of the Russell Midcap Value Index or the S&P MidCap 400 Index. The fund seeks capital growth for the long run.

TRMCXhas an annual expense ratio of 0.80%, which is below the category average of 1.18%. The fund has one-year annualized return of 35.6%, better than S&P MidCap 400 Index’s one-year return of 32.3%.

T. Rowe Price Emerging Markets Stock PRMSX seeks capital growth for the long run by investing a major portion of its assets in companies based in emerging markets. The fund invests in securities of companies with different market caps.

PRMSX has an annual expense ratio of 1.26%, which is below the category average of 1.47%. The fund has one-year annualized return of 31%, better than iShares MSCI Emerging Markets Index’s one-year return of 28.1%.

T. Rowe Price Global Stock PRGSX generally invests in both domestic and foreign-established firms. Though PRGSX focuses on acquiring common stocks of companies located in the developed nations, it may also invest in companies based in emerging economies. The fund invests a large chunk of its assets in stocks from a minimum of five countries, which may also include the US. PRGSX invests more than 40% of its assets in securities of foreign companies.

PRGSX has an annual expense ratio of 0.89%, which is below the category average of 1.27%. The fund has one-year annualized return of 23.5%, better than SPDR DJ Global Titans’ one-year return of 21.7%.

T. Rowe Price Japan PRJPX seeks capital appreciation for the long run by investing the majority of its assets in securities of companies which are based in Japan. PRJPX invests in a variety of Japanese companies and industries, irrespective of their size.

PRJPX has an annual expense ratio of 1.02%, which is below the category average of 1.41%. The fund has one-year annualized return of 22.2%, much better than Nikkei 225’s one-year return of 11.3%.

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