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By Harry Milling | 09-23-2009 01:12 PM

Two Buckets of Growth Picks

Early Manager of the Year contender Joe Milano of T. Rowe Price New America Growth highlights the portfolio's mix of durable and mature growth companies and his positioning for 2010.

Harry Milling: Hello, I'm Harry Milling, Morningstar mutual fund analyst, and I'm here with Joe Milano, T. Rowe Price New America Growth Manager, an excellent fund and one of our early contenders for "Fund Manager of the Year." Joe, good that you are here.

Joe Milano: Thanks for having me.

Milling: You have an interesting strategy with this fund for a growth fund. It is sort of a two-bucket approach. One bucket, more durable growth companies, and the second bucket, more established mature growth companies. Could you describe how that works?

Milano: Sure. What we are trying to do is build a portfolio that blends out to be a large-cap growth fund, pure growth fund. And what we found is that in order to really get to the growth rates that we want, what we tried to do is blend, as you said, some of the more mature growth companies that may grow their earnings over the course of a cycle 10 to 15 percent--companies like the Wal-Mart or Lockheed-Martin--and balance those with some names in the mid-cap space that might grow 15 to 20 percent over a multi-year, think about those as more durable growers. And kind of blend the portfolio out to a large-cap growth fund that has a little bit more growth maybe than the average.

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