TRSGX
TRPrice Spectrum Moderate Grwth Allc-Inv
Introduction to TRSGX’s Investment Strategy
The TRPrice Spectrum Moderate Growth Allocation Fund (TRSGX) is designed to achieve the highest total return over time, with a primary focus on capital growth and a secondary emphasis on income. This balanced aggressive fund invests in a diversified portfolio, maintaining an 80% allocation to equities and 20% to bonds and money market securities. Managed by T. Rowe Price, a reputable name in the investment industry, TRSGX aims to provide investors with a robust growth-oriented strategy while offering some degree of income stability. The fund’s strategic asset allocation is tailored for investors seeking a blend of growth and moderate risk, making it suitable for those with a higher risk tolerance looking to capitalize on market opportunities.
At A Glance
Executive Summary
TRSGX offers a balanced aggressive approach with 80% equity, 20% bonds, and a 0.78% expense ratio, ideal for growth-focused investors.
Balanced aggressive growth strategy Diversified portfolio with 80% equity Strong technology sector allocation
Higher expense ratio than some peers Negative alpha and Sharpe ratio Potential for higher volatility
Performance Analysis: Navigating Market Dynamics
TRSGX has demonstrated a mixed performance over various time frames, with a notable 24.49% return over the past year, outperforming many of its peers. However, its three-year annualized return of 2.35% and a ten-year return of 8.05% indicate periods of volatility and market challenges. The fund’s performance is benchmarked against the S&P 500 Total Return Index, which posted a 37.62% return over the past year, highlighting TRSGX’s relative underperformance in comparison. Despite this, the fund’s strategic allocation and sector diversification have allowed it to capture significant upside potential during favorable market conditions, although it has faced challenges in maintaining consistent returns during downturns.
Sector Allocation: Technology Leads the Charge
A significant portion of TRSGX’s portfolio is allocated to the technology sector, comprising 22.22% of its holdings. This heavy investment in technology reflects the fund’s aggressive growth strategy, capitalizing on the sector’s potential for high returns. Other notable sector allocations include financials at 14.97% and healthcare at 12.75%, providing a diversified exposure to industries with strong growth prospects. The fund’s sector allocation strategy is designed to leverage the strengths of high-performing industries while maintaining a balanced approach to risk management. This diversified sector exposure is a key factor in the fund’s ability to navigate varying market conditions and capitalize on emerging opportunities.
Risk Metrics: Understanding Volatility and Potential
TRSGX’s risk metrics reveal a complex picture of its volatility and potential returns. With a beta of 0.72, the fund exhibits lower volatility compared to the broader market, suggesting a more stable investment profile. However, the negative alpha of -13.17% and a Sharpe ratio of -1.39 indicate challenges in achieving risk-adjusted returns. The fund’s standard deviation of 2.74% and a Treynor ratio of -18.37 further highlight the volatility and risk associated with its aggressive growth strategy. Despite these metrics, the fund’s downside risk is relatively contained, with a downside risk (UI) of 1.44, suggesting that while the fund may experience fluctuations, it has mechanisms in place to manage potential losses.
Competitive Comparison: Expense and Yield Considerations
When compared to similar funds, TRSGX’s expense ratio of 0.78% is higher than some of its peers, such as UBS US Allocation-P (PWTYX) with an expense ratio of 0.75%. However, TRSGX offers a competitive yield of 1.60%, which is higher than some alternatives like Alger Balanced-I2 (ABLOX) with a yield of 1.18%. The fund’s higher expense ratio may be justified by its strategic asset allocation and potential for higher returns, but investors should weigh these costs against the fund’s performance and risk profile. The comparison with similar funds highlights TRSGX’s position as a balanced aggressive option with a focus on growth and income, albeit with a higher cost structure.
Portfolio Composition: A Diverse Asset Mix
TRSGX’s portfolio is characterized by a diverse asset mix, with a significant allocation to U.S. equities at 51.86% and non-U.S. equities at 25.90%. This global equity exposure is complemented by a 14.53% allocation to bonds, providing a balanced approach to growth and income. The fund’s top holdings include major technology companies like Microsoft Corp (2.89%) and NVIDIA Corp (2.81%), as well as T. Rowe Price’s own funds, such as the Real Assets I (5.63%) and Emerging Markets Equity (5.55%). This diverse asset allocation strategy is designed to capture growth opportunities across different markets and sectors, while also providing a degree of income stability through its bond holdings.
Max Drawdown and Recovery: Resilience in Adversity
TRSGX experienced a maximum drawdown of -6.3% during a brief period from July to August 2024, highlighting the fund’s exposure to market volatility. Despite this setback, the fund demonstrated resilience with a quick recovery, indicating effective risk management strategies. The drawdown length of just one month and immediate recovery underscore the fund’s ability to withstand market downturns and rebound swiftly. This resilience is a testament to the fund’s diversified portfolio and strategic asset allocation, which help mitigate the impact of adverse market conditions and support long-term growth objectives.
Conclusion: Is TRSGX Right for You?
TRSGX stands out as a balanced aggressive fund that offers a compelling mix of growth and income potential. Its strategic allocation of 80% equities and 20% bonds is designed for investors with a higher risk tolerance seeking to capitalize on market opportunities. While the fund’s higher expense ratio and mixed performance metrics may be a consideration, its strong sector allocation, particularly in technology, and its ability to recover from market downturns make it an attractive option for growth-focused investors. Ultimately, TRSGX is well-suited for those looking to balance aggressive growth with moderate income, making it a viable choice for investors aiming to enhance their portfolio’s long-term performance.
Similar Securities
OAAAX: Invesco Active Allocation-A | Balanced Aggressive Growth Fund
OAAAX offers a balanced aggressive strategy with a 0.98% expense ratio, focusing on U.S. equities and tactical allocations for growth and income.
GAIEX: American Funds Growth and Income-F2 | Balanced Aggressive Growth and Income
GAIEX offers a balanced aggressive strategy with a 1.98% yield and a competitive 0.45% expense ratio, focusing on growth and income.
BAAPX: BlackRock 80/20 Target Allocation-A | Aggressive Growth Fund
BAAPX offers aggressive growth with a 0.65% expense ratio, focusing on equity securities for high-risk investors.
SCGRX: Franklin Multi-Asset Moderate Growth-A | Balanced Aggressive Growth Fund
SCGRX offers a balanced aggressive strategy with a focus on large-cap funds, providing diversified growth potential with a 1.12% expense ratio.
ACEIX: Invesco Equity & Income-A | Balanced Aggressive Growth & Income
ACEIX offers a balanced aggressive strategy with a focus on income and growth, featuring a competitive expense ratio and diversified holdings.
Futher Reading
https://www.morningstar.com/funds/xnas/TRSGX/quote
https://finance.yahoo.com/quote/TRSGX/”>Yahoo: TRPrice Spectrum Moderate Grwth Allc-Inv
https://ftcloud.fasttrack.net/web/chart/TRSGX
https://www.wsj.com/market-data/quotes/mutualfund/TRSGX
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