- Before the growth rate there is the Fund's growth potential;
- Development of the Internet provides support to the Fund in the long-term perspective;
- The Fund demonstrates the good growth in comparison with alternative variants;
The Fund's aim is the long-lasting cost of the assets growth by investing to the number of technology, media and telecommunication companies.
The Fund includes 10 greatest issuers: (NASDAQ:AMZN) Amazon.com (9.98%), (NYSE:CCI) Crown Castle International (5.90%), (NYSE:AMT) American Tower (5.87%), (NASDAQ:FB) Facebook (5.47%), (PCLN) Priceline Group (5.43%), (NASDAQ:CMCSA) Comcast (5.05%), (NASDAQ:TMUS) T-Mobile US (4.64%), (NYSE:VZ) Verizon Communications (4.23%), (NASDAQ:GOOG) Alphabet (3.43%) and (NASDAQ:LBTYA) Liberty Global (3.14%).
If try to generalize companies of the present Fund, we can see that their main advantage (an ability to generate stable financial flows) makes (MUTF:PRMTX) a "calm harbor" asset during the period of unstable situation in the market. That is important for the conservative and institutional investors who provides the certain warranty of the Fund's capital growth .
The most of the greatest companies of the present Fund have accounted for 2Q. For example, let me recall the report of Amazon.com (AMZN)for the second quarter 2016, when the analysts expected $29.54 billion in revenue and earnings of $1.11 per share. Lastly Amazon beat on both metrics, with $30.4 billion in revenue and earnings of $1.78 per share. Facebook with surprisingly excellent report results demonstrated 63% growth in revenue from year till year. That points to the great growth potential of media and technology sector companies.
In my opinion, development of the Internet in the world can provide the solid base for the present companies from . The analysts expect the highest growth perspectives for the conception "internet of things". According to their point of view, during the 2014-2019 the present sector will demonstrate the 35% growth. In this case, we can expect the revenue growth of the companies from the Fund .
It is worth noting that the companies of the analyzed Fund depend on the borrowed funds and consequently on the FRS policy. The low percentage rates mean the low cost of the capital and that is a positive moment for telecommunication companies, for running of which global investments to modernization and net development are required.
In September FRS kept the key rate on the previous level, although at the meeting its possible growth till the end of the year was hinted at. The main condition for the growth rate are the strong macro-economic data. Besides, in November in the USA presidential elections are hold and that fully excludes the growth rate. Taking in account these facts, even if FRS ventures upon insignificant growth rate at the end of the year, monetary policy will stay gentle for a long period of time. In this accordance, we can conclude that the company has enough time to take advantage of the appreciative and gentle policy of FRS.
Upon analyzing the Fund rate of return history, we can notice that in comparison with other funds and also with index S&P 500 (SPX) the Fund T Rowe Price Media & Telecommunications Fund demonstrates the best rate of return results. In my opinion, that is thanks to the right selection of the issuers.
A good development base under "IT" provides rate of return for the Fond, potential time reserve until the rate of FRS grows. Also, what is important enough, low payment for the running 0.81% (lower than average index (1.47%) in this category). In my opinion, is a good choice in the present category for mid- and long-lasting investments.
Disclosure: I am/we are long PRMTX.