Is T. Rowe Price Mid-Cap Growth Fund (RPMGX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Mid Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Mid-Cap Growth Fund (RPMGX). RPMGX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes RPMGX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts impressive sales and/or earnings growth.

History of Fund/Manager

RPMGX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. T. Rowe Price Mid-Cap Growth Fund made its debut in June of 1992, and since then, RPMGX has accumulated about $19.42 billion in assets, per the most up-to-date date available. Brian W. H. Berghuis is the fund's current manager and has held that role since June of 1992.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 18.15%, 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 14.38%, which places it in the bottom 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 RPMGX over the past three years is 20.61% compared to the category average of 16.9%. The fund's standard deviation over the past 5 years is 16.73% compared to the category average of 13.99%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. 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. RPMGX has generated a positive alpha over the past five years of 1.12, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

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, RPMGX is a no load fund. It has an expense ratio of 0.74% compared to the category average of 1.18%. RPMGX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, T. Rowe Price Mid-Cap Growth Fund ( RPMGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, T. Rowe Price Mid-Cap Growth Fund ( RPMGX ) looks like a great potential choice for investors right now.

Want even more information about RPMGX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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