David Giroux’s Flagship Fund Is Reopening to Investors

The last time new investors could buy shares of the moderate-allocation T. Rowe Price Capital Appreciation PRWCX, Theranos was worth $9 billion, and founder Elizabeth Holmes was gracing the cover of Fortune. Twelve years later, Holmes has gone from Silicon Valley darling to incarcerated documentary fodder, while Capital Appreciation is still going strong and finally has room for new investors again.

The firm announced it will reopen the fund to new investors on Dec. 7, 2026, after being closed since June 2014. Over that time, the mutual fund’s assets have grown to $70 billion, up from about $21 billion. T. Rowe Price’s 2022 reorganization of its investment team helped create more capacity for manager David Giroux’s strategy. His team moved into a division established to house the firm’s small- and mid-cap managers, leaving him as its only large-cap manager. That reduced the likelihood of running into regulatory limits on how much the entity could invest in a single company.

Rather than immediately reopening the mutual fund, Giroux and his team used the additional capacity to launch their first actively managed equity exchange-traded fund, T. Rowe Price Capital Appreciation Equity ETF TCAF. The firm has since introduced several other ETFs that adapt strategies long offered in its flagship mutual fund, as well as a moderately conservative-allocation ETF developed in collaboration with T. Rowe Price’s quantitative team.

As T. Rowe Price Capital Appreciation Equity ETF has grown in popularity, the investment landscape for balanced funds has continued to shift. One of their biggest distribution channels, 401(k) plans, has increasingly favored target-date funds. Fidelity, the largest retirement-plan recordkeeper, reports that roughly $2 of every $3 in new 401(k) contributions now goes into target-date funds. Against that backdrop, T. Rowe Price is reopening the Capital Appreciation fund as it experiences a rare bout of outflows.

The process appears to have ample room to run. Giroux and his team have typically favored mega- and large-cap stocks, though their exposure to mid-caps has grown recently. That evolution is intentional, and the strategy is designed to adapt as opportunities change. Reopening the fund to new investors could eventually make that flexibility harder to maintain, however. That’s not a concern today, but it’s something worth watching as assets grow.

60/40 Portfolio Fans Should Rejoice

The reopening gives investors a rare opportunity to invest in the strategy that made Giroux a three-time winner of Morningstar’s annual award for managers. While T. Rowe Price’s newer ETFs offer more-focused expressions of some of the team’s investment ideas, Capital Appreciation gives Giroux the broadest toolkit to work with. He can combine stock selection, asset-allocation shifts, and a distinctive approach to fixed income in a single portfolio, adjusting the mix as opportunities change.

That flexibility has served investors well. The three return drivers have kept the fund in the top decile of its peer group over the five-, 10-, and 15-year periods ended October 2026, despite some uncharacteristic recent stock-selection stumbles.

Giroux and his team run a concentrated portfolio of about 50 stocks, which typically account for 60% to 70% of the fund’s assets. They also adjust the fund’s equity exposure when they see opportunities. The strategy’s neutral equity weight is around 62%, but the team tends to add to stocks when markets have fallen more than 10% and valuations become more attractive. Historically, it has been quick to bring equity exposure back to neutral as markets recover. New research conducted with T. Rowe Price’s quantitative team, however, suggests that holding these overweight positions longer, potentially for up to a year, may produce better results.

Consistency Is Key

The fund’s returns haven’t just been strong relative to peers; they’ve been remarkably consistent. Since Giroux took over, its oldest share class has finished in the top half of its category in every full calendar year except 2025, reflecting the combination of savvy stock selection and deft asset-allocation shifts.

That rare stumble reflected challenges on both fronts. Stock selection suffered as longtime top holding Microsoft MSFT fell amid a broader selloff in software stocks, fueled by concerns that artificial intelligence could disrupt its business. The fund’s historically limited exposure to non-US stocks was another headwind, as international markets handily outperformed in 2025. The average peer held about 6% of assets in non-US stocks.

Still One of the Best

Reopening the fund is another change for Giroux and his team to navigate, but we have confidence in their ability to manage it. Their willingness to adapt has served investors well through the twists and turns of the stock and bond markets, and we expect that flexibility to serve them as the fund takes in new assets.