Any investors hoping to find a Small Cap Growth fund could think about starting with T. Rowe Price QM US Small Cap Growth Equity (PRDSX). PRDSX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
The world of Small Cap Growth funds is an area filled with options, such as PRDSX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
T. Rowe Price is based in Baltimore, MD, and is the manager of PRDSX. T. Rowe Price QM US Small Cap Growth Equity debuted in January of 1998. Since then, PRDSX has accumulated assets of about $3.81 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 8.98%, and is in the middle 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 7.69%, which places it in the top 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. Compared to the category average of 17.27%, the standard deviation of PRDSX over the past three years is 19.9%. Over the past 5 years, the standard deviation of the fund is 21.44% compared to the category average of 18.34%. 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 1.07, so it is likely going to be more volatile than 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. PRDSX has generated a negative alpha over the past five years of -5.67, demonstrating 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, PRDSX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.03%. Looking at the fund from a cost perspective, PRDSX 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.
Overall, T. Rowe Price QM US Small Cap Growth Equity ( PRDSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price QM US Small Cap Growth Equity ( PRDSX ) looks like a great potential choice for investors right now.
Your research on the Small Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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