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

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 Core (TPLGX). TPLGX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

TPLGX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of TPLGX. T. Rowe Price Institutional Large Cap Core debuted in October of 2003. Since then, TPLGX has accumulated assets of about $2.88 billion, according to the most recently available information. The fund is currently managed by Paul Greene who has been in charge of the fund since October of 2021.

Performance

Of course, investors look for strong performance in funds. TPLGX has a 5-year annualized total return of 10.35%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 28.26%, 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. TPLGX's standard deviation over the past three years is 15.23% compared to the category average of 15.52%. Over the past 5 years, the standard deviation of the fund is 19.56% compared to the category average of 19.11%. 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. TPLGX has a 5-year beta of 1.17, which means it is likely to be more volatile than the market average. 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. With a negative alpha of -4.51, 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 primarily on equities that are traded in the United States.

Currently, this mutual fund is holding 91.94% in stocks, and these companies have an average market capitalization of $918.50 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Retail Trade

Turnover is about 17.1%, so those in charge of the fund make fewer trades than its comparable peers.

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, TPLGX is a no load fund. It has an expense ratio of 0.56% compared to the category average of 0.93%. TPLGX is actually cheaper than its peers when you consider factors like cost.

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.

Bottom Line

Overall, T. Rowe Price Institutional Large Cap Core ( TPLGX ) 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 great potential choice for investors right now.

For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into TPLGX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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This article originally published on Zacks Investment Research (zacks.com).

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