Large Cap Growth fund seekers should consider taking a look at T. Rowe Price Growth Stock Fund (PRGFX). PRGFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
PRGFX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
T. Rowe Price is based in Baltimore, MD, and is the manager of PRGFX. Since T. Rowe Price Growth Stock Fund made its debut in April of 1950, PRGFX has garnered more than $11.33 billion in assets. James Stillwagon is the fund’s current manager and has held that role since January of 2025.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 7.46%, and it sits in the bottom 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 23.72%, 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. The standard deviation of PRGFX over the past three years is 14.59% compared to the category average of 11.54%. The fund’s standard deviation over the past 5 years is 19.28% compared to the category average of 13.84%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. PRGFX has a 5-year beta of 1.15, which means it is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -6.87, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 93.94% of its assets in stocks, with an average market capitalization of $953.86 billion. The fund has the heaviest exposure to the following market sectors:
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Technology
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Retail Trade
Turnover is about 35.2%, so those in charge of the fund make fewer trades than comparable funds.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRGFX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 0.93%. PRGFX 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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, even with its comparatively weak performance, worse downside risk, and lower fees, T. Rowe Price Growth Stock Fund ( PRGFX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
This could just be the start of your research on PRGFX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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This article originally published on Zacks Investment Research (zacks.com).