Yahoo Finance Is T. Rowe Price Value Fund (TRVLX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Large Cap Value fund category, T. Rowe Price Value Fund (TRVLX) could be a potential option. TRVLX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
TRVLX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds'high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of TRVLX. The T. Rowe Price Value Fund made its debut in September of 1994 and TRVLX has managed to accumulate roughly $3.29 billion in assets, as of the most recently available information. Ryan Hedrick is the fund's current manager and has held that role since January of 2023.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.45%, and it sits in the top 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 8.66%, 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. The standard deviation of TRVLX over the past three years is 15.53% compared to the category average of 14.83%. The standard deviation of the fund over the past 5 years is 17.57% compared to the category average of 16.13%. 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 0.9, so it is likely going to be less 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. TRVLX has generated a negative alpha over the past five years of -1.64, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 90.11% of its holdings in stocks, which have an average market capitalization of $145.90 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
With turnover at about 62.3%, this fund is making more trades per year than the comparable average.
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, TRVLX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.95%. From a cost perspective, TRVLX 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.
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 Value Fund ( TRVLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Value, make sure to go to www.zacks.com/funds/mutual-funds 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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