There aren’t many dogs among the broad selection of 200-plus T Rowe Price funds. Therefore, finding solid, well-managed mutual funds in the T. Rowe Price fund family can be achieved without much effort. But choosing three of the best funds for 2015 was no easy task.
To arrive at the top three funds, I eliminated fund categories and sectors that I believe have anything less than the very best chance of beating the broad market indices. Some of those categories and sectors include small-cap stock, real estate, Pacific Rim/Asia, emerging markets, and high-yield bond. Although a top-performer in the target-date category, I also eliminated the T Rowe Price target retirement funds.
After my first round of elimination, I narrowed down to the three most compelling choices by culling out several otherwise outstanding funds to arrive at only the best T. Rowe Price funds for 2015.
Here they are, in no particular order.
Best T. Rowe Price Funds for 2015 — T Rowe Price Global Technology (PRGTX)
Click to EnlargeThe technology sector is a finalist on many lists and forecasts for best performers in 2015 and T. Rowe Price Global Technology (PRGTX) could be among the best of that group for the year.
By searching throughout the world, PRGTX is able to capture tech stocks with the most compelling stories and the greatest growth potential. In the Global Technology portfolio, you’ll see a blend of the old tech names, such as Amazon (AMZN) and Google (GOOG), mixed in with the new, such as Alibaba (BABA).
The outstanding performance record of this fund is difficult to ignore. PRGTX ranks in the top 1% in performance for 1-year, 3-year and 10-year returns, beating 99% of tech sector peers. The current managers, on board since mid-2012, can only claim credit for the past three years, but they’ve been analysts at T Rowe Price for at least 10 years each.
The expense ratio for PRGTX is below average at 0.95% and the minimum initial purchase is $2,500.
Best T Rowe Price Funds for 2015 — T. Rowe Price Health Sciences (PRHSX)
Healthcare is another sector that can continue its market-leading ways in 2015, and T. Rowe Price Health Sciences (PRHSX) sits within the cream of the crop.
PRHSX has achieved its past success by avoiding the trap of remaining too heavy in one health sub-sector — such as big pharma — and instead balancing portfolio holdings across bio-technology, bio-pharmaceuticals, hospital corporations, and medical devices. Top holdings include Gilead Sciences Inc (GILD), Alexion Pharmaceuticals, Inc. (ALXN) and McKesson Corporation (MCK).
Like many of T. Rowe Price’s specialty funds, Health Sciences is a standout performer in its category. The 1-year, 3-year, 5-year, 10-year and 15-year returns place PRHSX in the top 25% among healthcare sector peers, outperforming 75% of its competition. Although the current fund manager, Taymour R. Tamaddon, has been at the helm of the fund for just under two years, performance has remained significantly above average for his tenure.
The expense ratio for PRHSX is low at 0.79% and the minimum initial purchase is $2,500.
Best T. Rowe Price Funds for 2015 — T. Rowe Price Africa and Middle East (TRAMX)
Click to EnlargeInvestors who are paying attention know that Africa is a compelling story of potential, and T. Rowe Price Africa and Middle East (TRAMX) has been paying close attention while reaping the rewards of research.
Although emerging markets as a collective category may struggle in 2015, a few areas show promise. If there was one country outside of the United States to pick for the best growth in the world, Africa would be in the short list of finalists.
When thinking of Africa, most Westerners might think of the Ebola virus or armed conflicts in Kenya and Nigeria. However, T. Rowe Price has been focusing on rapid economic growth, improved political stability and a rising middle-class population.
Portfolio holdings, such as South Africa’s Aspen Pharmacare Holdings Ltd (JSE:APN), may have flown under the radar of the investor herd, it has enjoyed a year-to-date jump of more than 50%. Egypt’s Commercial International Bank (CIBEY) and and the middle east’s Kuwait Projects Co Holding share similar performance records for 2014.
The expense ratio of 1.42% for TRAMX is average for its category and the minimum purchase amount is $2,500.
As of this writing, Kent Thune did not hold a position in any of the aforementioned securities. Under no circumstances does this information represent a recommendation to buy or sell securities.
