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

Any investors hoping to find a Large Cap Growth fund could think about starting with T. Rowe Price Institutional Large Cap Growth (TRLGX). TRLGX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

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

TRLGX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. The T. Rowe Price Institutional Large Cap Growth made its debut in October of 2001 and TRLGX has managed to accumulate roughly $21.60 billion in assets, as of the most recently available information. The fund's current manager, Taymour Tamaddon, has been in charge of the fund since January of 2017.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 10.28%, and is in the middle 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 25.81%, which places it in the top 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. Over the past three years, TRLGX's standard deviation comes in at 14.03%, compared to the category average of 13.03%. The standard deviation of the fund over the past 5 years is 18.16% compared to the category average of 15.81%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. TRLGX has a 5-year beta of 1.1, 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. TRLGX has generated a negative alpha over the past five years of -4.07, demonstrating that managers in this portfolio find it difficult to pick 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 91.56% in stocks, with an average market capitalization of $831.33 billion. The fund has the heaviest exposure to the following market sectors:

• Technology

Turnover is 27.1%, which means, on average, the fund makes fewer trades than its comparable peers.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, TRLGX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 0.93%. TRLGX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $500,000, 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.

Bottom Line

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

This could just be the start of your research on TRLGX 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. 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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