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T. Rowe Price’s Brutal 2022

The firm’s funds usually hold up well in a downturn, but its growth funds posted big losses in 2022.

T. Rowe's Brutal 2022

Russ Kinnel: T. Rowe Price has some of the best growth funds. They are well known for getting in early to names like Uber UBER and Tesla TSLA, sometimes even before the companies go public.

But in 2022 that aggression came back to haunt them.

T. Rowe’s Brutal 2022

These funds earn Morningstar Analyst Ratings of Silver.

  1. T. Rowe Price Growth Stock PRGFX
  2. T. Rowe Price Blue Chip Growth TRBCX
  3. T. Rowe Price New Horizons PRNHX

T. Rowe Price Growth Stock lost 40%, T. Rowe Price Blue Chip Growth lost 39%, and T. Rowe Price New Horizons lost 37%. One common thread throughout the funds was Rivian RIVN, an electric vehicle maker that T. Rowe invested in aggressively only to see its shares fall 82% in 2022. [Correction: While many T. Rowe Price funds held Rivian in 2022, that company was not in T. Rowe Price New Horizons’ portfolio last year.] Other holdings that were hard-hit included Tesla, Amazon AMZN, Meta META, and Spotify SPOT.

T. Rowe generally does strong research to avoid blowups, but last year was a year that punished nearly all high-valuation stocks. And Rivian certainly looks like a mistake at the moment, but all managers make mistakes. Still, the losses were a little surprising at T. Rowe. Both Blue Chip Growth and Growth Stock’s five-year returns are now bottom-decile, though on the plus side, New Horizons is still top-quartile.

Historically, T. Rowe has lost less than most peers in most downturns, but some of their funds are more cautious than others. So, it really is a sobering year for T. Rowe Price, but we’re maintaining our Silver rating on all three of these funds as we see good fundamentals despite a tough year.

Watch “3 Vanguard Updates” from Russ Kinnel.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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