What's Behind T. Rowe Price's New Quant Funds?
The firm's quantitative fund expansion seems consistent with its identity for reasonably priced, low-turnover investment strategies.
T. Rowe Price has long been known for its bottom-up, analyst-driven research, which is the building block for nearly all of its funds. It has generally done well with that approach across asset classes, equity styles, and market-cap range: Three fourths of its funds ranked in the top third of their respective categories over the past decade.
It was surprising, then, to see the firm launch three new quantitative funds in 2016 under the "QM" (Quantitative Management) moniker: T. Rowe Price QM US Small & Mid-Cap Core Equity (TQSIX), T. Rowe Price QM US Value Equity (TQVIX), and T. Rowe Price QM Global Equity (TQGIX). What’s more, while quantitative funds account for a fairly trivial share of T. Rowe’s assets under management (about $2.4 billion of T. Rowe’s $478 billion in mutual fund assets as of April 2016), the firm has been investing in the capability: Indeed, the quantitative team, led by portfolio manager Sudhir Nanda, is slated to add an eighth member to its ranks in July.
Katie Rushkewicz Reichart does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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