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T. Rowe Price Blue Chip Growth's Manager to Retire

Larry Puglia will step away after leading the fund for 28 years, but its future is still bright in the hands of successor Paul Greene.

Larry Puglia, manager of T. Rowe Price Blue Chip Growth TRBCX since its 1993 inception, will retire at year-end 2021. A well-telegraphed transition has been in the works since Paul Greene became associate portfolio manager in January 2020, and he'll officially take over on Oct. 1, 2021. With a smooth handoff setting the stage for continued success, the strategy retains its Above Average Process and People ratings, and its Morningstar Analyst Rating stays Silver for all but the most expensive share class, which is Bronze.

Puglia will leave behind a remarkable record at one of the industry's biggest actively run strategies. Its 12.0% annualized gain during his tenure through 2020 beat the Russell 1000 Growth Index's 10.8% and held up well on a risk-adjusted basis. The strategy remained competitive in recent years amid its burgeoning size and threats from cheaper passively managed offerings, which took the shine off many of the industry's actively managed U.S. large-cap funds. T. Rowe Price Blue Chip Growth previously held an Analyst Rating of Gold, reflecting Puglia's skillful execution and consistently strong results, only dropping to Silver in 2020 in anticipation of his eventual retirement.

While the process remained steady under Puglia's longtime guidance, he adapted to the market's changing conditions with a characteristic mix of opportunism and reasonable caution. A longtime owner of AMZN and Facebook FB, some of the fund's most successful holdings over the past decade, he was not afraid to take big stakes in companies that were becoming increasingly relevant. Yet the portfolio remained diversified across more than 100 holdings with broad sector representation, helping keep volatility in check. While the U.S. remained the fund's primary hunting ground, Puglia capitalized on opportunities such as Chinese e-commerce giant Alibaba BABA, a holding for the past six years; despite recent headwinds, it boosted performance significantly in 2017, when Puglia was a finalist for the Morningstar Fund Manager of the Year award. He also was nominated in 2013.

Greene is no stranger here. As an analyst, he contributed insights on some of the portfolio's most prominent holdings in recent years, including Amazon and Facebook, and came into the associate manager role familiar with 40% of the portfolio's assets. T. Rowe Price Blue Chip Growth had the most stock-picking success in the technology and communications sectors during the past decade, according to Morningstar attribution, a testament to Greene's influence. Greene's stellar results at T. Rowe Price Communications & Technology PRMTX during seven years at the helm also provide confidence.

There will be some challenges. Greene must adjust to running a much bigger asset base of more than $100 billion. While liquidity may not be an issue in the large-cap universe, it's arguably harder to maneuver a large asset base. However, Greene is a long-term investor, perhaps even more so than Puglia, with turnover at Greene's previous charge even lower than it has been here.

As previously announced, T. Rowe Price also will split its investment-research organization in two in 2022, which could take some getting used to. The firm's large-growth strategies, however, will stay together, likely with most of the analysts it relies on the most, so the reorganization's impact should be muted.

While the retirement of a successful manager is a loss, long-term investors in this strategy should take heart in the careful execution of this transition and remain confident in its prospects under Greene's leadership.

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