T. Rowe Price Value Fund

Scorecard
5 / 5 Stars
Lipper
5 5 4 4 2
Zacks Investment Research
2 (Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A- (Buy)

#4 in Large Value

U.S. News evaluated 329 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 25.98 percent over the past year, 15.91 percent over the past three years, 24.54 percent over the past five years, and 8.80 percent over the past decade. 

Trailing Returns Updated 03.31.2014
Year to date 3.6%
1 Year 26.0%
3 Years (Annualized) 15.9%
5 Years (Annualized) 24.5%
10 Years (Annualized) 8.8%

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Summary

T. Rowe Price Value has traditionally done a fine job of identifying underpriced companies.

As of April 22, 2014, the fund has assets totaling almost $18.93 billion invested in 121 different holdings. Its portfolio consists primarily of shares of large companies. 

Like most value funds, this one looks for companies with strong fundamentals that nonetheless look cheap. Often, that means that management will seek out companies that are temporarily struggling. For instance, Bank of America, which finished last year in the red, and Pfizer, which broke even for the year, occupy prominent spots in the fund's portfolio. Lately, the fund's bets have been paying off. Notably, it finished in the top fifth of Morningstar's large value category in both 2009 and 2010. One of the bigger changes to affect this fund lately was the departure of manager John Linehan at the end of 2009. Linehan handed the fund off to current manager Mark Finn. Says Morningstar: "T. Rowe Price is known for smooth manager transitions, and the handoff at this fund reinforces that reputation." The fund has returned 25.98 percent over the past year and 15.91 percent over the past three years. 

Historically, the fund has been a steady performer. While it has had very few banner years, its 10-year trailing returns still landed it, as of the end of the first quarter, in the top fifth of its Morningstar category. Over time, the fund's diversification has helped smooth out volatility. Management owns more than 100 names, which leaves plenty of room for the fund to absorb the impacts of the occasional dud. The fund has returned 24.54 percent over the past five years and 8.80 percent over the past decade.  

Investment Strategy

The fund looks to own strong companies that are trading at a discount. Management will gauge value by considering a number of factors, including price-to-earnings ratios and the potential for future changes in the structure of particular companies. The fund is highly diversified and owns upwards of 100 names. Management also likes to keep a lid on the fund's turnover ratio, which currently sits at about 30 percent.

Role in Portfolio

Morningstar calls the fund a "core" holding.

Management

Mark Finn manages the fund.

Fees

T. Rowe Price Value Fund has an expense ratio of 0.84 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 2 for one year, 2 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

In the annual Lipper/Barron's Fund Families Survey of 2010, T. Rowe Price ranks 12th out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying: "On most fronts, this fund is strong, benefiting from a top-rate investment culture, moderate fees, and a spotless regulatory history. If management invested more and if the fund had a more-independent board of directors, it would score even more highly."

Morningstar 2011-03-31

In the annual Lipper/Barron's Fund Families Survey of 2010, T. Rowe Price ranks 12th out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying: "On most fronts, this fund is strong, benefiting from a top-rate investment culture, moderate fees, and a spotless regulatory history. If management invested more and if the fund had a more-independent board of directors, it would score even more highly."

Morningstar 2011-03-31