Is T. Rowe Price New Horizons (PRNHX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Small Cap Growth fund category, a potential starting could be T. Rowe Price New Horizons (PRNHX). PRNHX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Small Cap Growth funds is an area filled with options, such as PRNHX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PRNHX. The T. Rowe Price New Horizons made its debut in June of 1960 and PRNHX has managed to accumulate roughly $4.78 billion in assets, as of the most recently available information. Shaun Michael Currie is the fund's current manager and has held that role since July of 2025.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of -0.51%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.19%, which places it in the bottom 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, PRNHX's standard deviation comes in at 17.95%, compared to the category average of 13.29%. Looking at the past 5 years, the fund's standard deviation is 20.3% compared to the category average of 15.19%. 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. PRNHX has a 5-year beta of 1.05, 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. PRNHX has generated a negative alpha over the past five years of -12, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

As of the last filing date, the mutual fund has 78.48% of its assets in stocks, which have an average market capitalization of $12.23 billion. The fund has the heaviest exposure to the following market sectors:

• Health
• Industrial Cyclical
• Technology
• Other

Turnover is 92.8%, which means this fund makes more traders than comparable funds in a given year.

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, PRNHX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 0.97%. So, PRNHX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively weak performance, worse downside risk, and lower fees, T. Rowe Price New Horizons ( PRNHX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.

For additional information on the Small 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 PRNHX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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