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If investors are looking at the Large Cap Growth fund category, T. Rowe Price Tax-Efficient Equity (PREFX) could be a potential option. PREFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PREFX. The T. Rowe Price Tax-Efficient Equity made its debut in December of 2000 and PREFX has managed to accumulate roughly $374.54 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 December of 2000.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 15.82%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.01%, 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. PREFX's standard deviation over the past three years is 20.18% compared to the category average of 17.83%. The standard deviation of the fund over the past 5 years is 20.73% compared to the category average of 18.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.08, so investors should note that it is hypothetically 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. With a positive alpha of 0.57, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.