TQSAX
TRPrice Integrated US SMCap Core Eq-Adv
Dynamic Growth in Small and Mid-Cap Equities
The TRPrice Integrated US SMCap Core Eq-Adv (TQSAX) fund is designed to capture long-term capital growth by investing predominantly in small and mid-cap U.S. companies. With a strategic focus on equity securities, the fund allocates at least 80% of its net assets to these sectors, aiming to leverage the growth potential inherent in smaller, more agile companies. This approach is particularly appealing to investors seeking exposure to the dynamic and often underexplored segments of the U.S. market. The fund’s emphasis on common stocks aligns with its growth objective, providing a robust platform for capital appreciation over time.
At A Glance
Executive Summary
TQSAX offers robust growth with a 42.49% 1-year return, focusing on small/mid-cap U.S. equities. High alpha and sector diversity enhance its appeal.
Strong 1-year return of 42.49%. High alpha of 4.83% indicates superior performance. Diverse sector allocation enhances growth potential.
Higher expense ratio at 1.14%. No yield, not ideal for income-focused investors. Higher beta of 1.13 suggests increased volatility.
Impressive Performance Metrics
TQSAX has demonstrated impressive performance, particularly over the past year, with a remarkable 42.49% return. This performance significantly outpaces its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return over the same period. The fund’s alpha of 4.83% further underscores its ability to generate returns above the benchmark, indicating effective management and strategic asset allocation. Investors looking for a fund that not only meets but exceeds market expectations will find TQSAX’s performance metrics compelling, especially in the context of its growth-oriented strategy.
Sector Diversification as a Growth Catalyst
The fund’s sector allocation is a key driver of its growth potential, with significant investments in technology (18.83%), industrials (18.21%), and healthcare (16.31%). This diversified approach allows TQSAX to capitalize on growth opportunities across various sectors, mitigating risks associated with sector-specific downturns. The fund’s exposure to cyclical sectors (10.25%) and financials (13.33%) further enhances its ability to adapt to changing market conditions. Such diversification not only supports the fund’s growth objectives but also provides a balanced risk-reward profile, making it an attractive option for investors seeking both stability and growth.
Risk and Volatility Considerations
While TQSAX offers substantial growth potential, it also comes with a higher risk profile, as indicated by its beta of 1.13. This suggests that the fund is more volatile than the market, which could lead to larger fluctuations in value. However, the fund’s Sharpe ratio of 0.30 and Treynor ratio of 4.25 indicate that it has been able to achieve returns commensurate with its risk level. The fund’s maximum drawdown of -8.0% and a quick recovery period highlight its resilience in adverse market conditions. Investors should weigh these factors carefully, considering their own risk tolerance and investment horizon.
Competitive Expense Ratio Analysis
TQSAX’s expense ratio of 1.14% is higher than some of its peers, such as the Eventide Dividend Opportunities-I (ETIDX) and BBH Select Series – MidCap-Inst (BBMIX), which have expense ratios below 1%. While this may be a consideration for cost-conscious investors, the fund’s superior performance metrics and strategic sector allocation may justify the higher fees. The fund’s ability to deliver high returns and maintain a diversified portfolio could offset the impact of its expense ratio, making it a viable option for those prioritizing growth over cost.
Top Holdings and Market Cap Focus
The fund’s top holdings include Tenet Healthcare Corp, RPM International Inc, and Textron Inc, each representing a small percentage of the overall portfolio. This diversified holding strategy reduces concentration risk and enhances the fund’s ability to capture growth across different industries. With a market cap allocation heavily weighted towards small (42.90%) and medium (39.42%) companies, TQSAX is well-positioned to benefit from the growth potential of these segments. This focus on smaller market caps aligns with the fund’s objective of achieving long-term capital appreciation through strategic investments in underrepresented sectors.
Comparative Analysis with Similar Funds
When compared to similar funds like the Loomis Sayles Small/MidCap Growth-Inst (LSMIX) and Brown Advisory MidCap Growth-Inv (BMIDX), TQSAX stands out with its higher 1-year return of 42.49%. While its expense ratio is higher, the fund’s performance metrics, including a high alpha and diversified sector allocation, provide a competitive edge. Investors seeking a fund that offers both growth and strategic diversification may find TQSAX more appealing than its peers, particularly those with lower returns and less sector diversity. This comparative advantage highlights TQSAX’s potential as a leading choice in the mid-cap growth category.
Conclusion: A Strategic Choice for Growth-Oriented Investors
TQSAX is a compelling option for investors seeking long-term growth through exposure to small and mid-cap U.S. equities. Its impressive performance, strategic sector diversification, and robust risk management make it a standout choice in the mid-cap category. While the fund’s higher expense ratio and volatility may deter some, its ability to deliver superior returns and adapt to market changes offers significant appeal. TQSAX is particularly suited for growth-oriented investors with a higher risk tolerance, looking to capitalize on the dynamic opportunities within the U.S. equity market.
Similar Securities
JSVSX: Janus Henderson Small/MidCap Value-S | Growth Potential in Undervalued MidCaps
JSVSX offers growth through undervalued midcap stocks with a strong 1-year return of 43.42%, outperforming its benchmark.
PRDMX: TRPrice Diversified MidCap Growth-Inv | High-Return MidCap Growth Fund
PRDMX offers a 44.07% 1-year return with a focus on mid-cap growth, outperforming its benchmark with a 0.86% expense ratio.
PMVAX: Putnam Sustainable Future-A | Sustainable MidCap Growth Fund
PMVAX offers sustainable growth with a focus on US midcap stocks, featuring a diverse sector allocation and competitive returns.
PEXMX: TRPrice Extended Equity Market IxFd | Growth-Focused MidCap Fund
PEXMX offers growth potential with a focus on small and midcap stocks, boasting a competitive 0.24% expense ratio and strong recent performance.
LBGAX: ClearBridge MidCap Growth-A | MidCap Growth Investment
LBGAX offers a robust 39.67% 1-year return with a focus on mid-cap equities, outperforming its benchmark with a 2.00% alpha.
Futher Reading
https://www.morningstar.com/funds/xnas/TQSAX/quote
https://finance.yahoo.com/quote/TQSAX/”>Yahoo: TRPrice Integrated US SMCap Core Eq-Adv
https://ftcloud.fasttrack.net/web/chart/TQSAX
https://www.wsj.com/market-data/quotes/mutualfund/TQSAX
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