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Having trouble finding a Mid Cap Growth fund? T. Rowe Price Diversified Mid Cap Growth (PRDMX) is a potential starting point. 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
T. Rowe Price is responsible for PRDMX, and the company is 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 $904 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. PRDMX has a 5-year annualized total return of 11.94% 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 15.87%, 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. Over the past three years, PRDMX's standard deviation comes in at 13.67%, compared to the category average of 14.11%. Looking at the past 5 years, the fund's standard deviation is 13.53% compared to the category average of 13.97%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, PRDMX lost 51.81% and outperformed its peer group by 0%. This makes the fund a possibly on par choice than its peers during a sliding market environment.
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. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 1.18. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.