In This Article:
Any investors hoping to find a Mid Cap Growth fund could think about starting with T. Rowe Price Diversified Mid Cap Growth (PRDMX). PRDMX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that PRDMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
PRDMX finds itself in the T. Rowe Price family, based out of Baltimore, MD. The T. Rowe Price Diversified Mid Cap Growth made its debut in January of 2004 and PRDMX has managed to accumulate roughly $836 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 January of 2004.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.54%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 15.15%, which places it in the top 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 PRDMX over the past three years is 10.98% compared to the category average of 11.55%. The fund's standard deviation over the past 5 years is 11.01% compared to the category average of 11.41%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PRDMX's case, the fund lost 51.81% in the most recent bear market and outperformed its peer group by 0.69%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.03, so investors should note that it is hypothetically as volatile as 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. Over the past 5 years, the fund has a negative alpha of -0.28. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.