Is T. Rowe Price Institutional Large Cap Growth (TRLGX) a Strong Mutual Fund Pick Right Now?

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

Load Error

Objective

TRLGX 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.

History of Fund/Manager

T. Rowe Price is responsible for TRLGX, and the company is based out of Baltimore, MD. T. Rowe Price Institutional Large Cap Growth debuted in October of 2001. Since then, TRLGX has accumulated assets of about $24.04 million, according to the most recently available information. The fund’s current manager, Taymour Tamaddon, has been in charge of the fund since January of 2017.

Performance

Investors naturally seek funds with strong performance. TRLGX has a 5-year annualized total return of 26.6% 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 24.28%, 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, TRLGX’s standard deviation comes in at 19.42%, compared to the category average of 20.12%. The fund’s standard deviation over the past 5 years is 16.06% compared to the category average of 16.45%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.99, so it is likely going to be as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. TRLGX’s 5-year performance has produced a positive alpha of 7.62, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

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 mostly on equities that are traded in the United States.

This fund is currently holding about 88.66% stock in stocks, with an average market capitalization of $621.25 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
  3. Finance

Turnover is about 11.8%, so those in charge of the fund make fewer trades than the average comparable fund.

Expenses

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, TRLGX is a no load fund. It has an expense ratio of 0.54% compared to the category average of 1.02%. TRLGX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $1 million and that each subsequent investment has no minimum amount.

Bottom Line

Overall, T. Rowe Price Institutional Large Cap Growth ( TRLGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, T. Rowe Price Institutional Large Cap Growth ( TRLGX ) looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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