Small Cap Blend fund seekers should consider taking a look at T. Rowe Price Institutional Small-Cap Stock (TRSSX). TRSSX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
TRSSX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
T. Rowe Price is based in Baltimore, MD, and is the manager of TRSSX. Since T. Rowe Price Institutional Small-Cap Stock made its debut in October of 2000, TRSSX has garnered more than $4.06 billion in assets. Alex Roik is the fund’s current manager and has held that role since July of 2023.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.51%, 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 10.3%, 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 TRSSX over the past three years is 17.45% compared to the category average of 19.75%. Looking at the past 5 years, the fund’s standard deviation is 17.55% compared to the category average of 21.54%. This makes the fund less 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. TRSSX has a 5-year beta of 0.99, which means it is likely to be as volatile as 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. The fund has produced a negative alpha over the past 5 years of -7.11, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, TRSSX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.17%. So, TRSSX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1.00 million, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, T. Rowe Price Institutional Small-Cap Stock ( TRSSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don’t stop here for your research on Small Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare TRSSX to its peers 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).