An extensive T. Rowe Price study showed that our strategic investing approach has prevailed through the many market fluctuations of the past two decades. The majority of our 18 diversified active U.S. equity mutual funds beat their benchmarks across multiple time periods over 20 years or their lifetime.1 And this outperformance improved over time.
We attribute our success to going beyond the numbers. We dig deeper to gain a better understanding of where a company stands today and where we think it could go in the future.
The Strength Of Strategic Investing
20 Years Of Success
Our funds excelled when measured by active success rates (the number of times a fund beat its benchmark over a given time horizon) and by excess returns (the margin by which the fund beat its benchmark). These results are also net of fees, meaning that the T. Rowe Price funds outperformed even after accounting for the impact of fund expenses.
Rolling periods 12/31/1997 through 12/31/2017
Excess returns after expenses
Average annualized time-weighted returns, net of fees (over rolling 10-year periods)
Past performance cannot guarantee future results. For more information on the T. Rowe Price funds used in this study, including fund performance, please visit troweprice.com/approachstudy.
Sources: T. Rowe Price, Russell, and Standard & Poor's; data analysis by T. Rowe Price.
Longer Horizons, Stronger Returns
What seems like a relatively small amount of excess returns can grow over time to produce a substantial impact on the overall portfolio value.
Hypothetical results of a $100,000 investment in the S&P 500 vs. S&P 500 + one percentage point over 20 years
12/31/1997 through 12/31/2017
The results shown above are hypothetical and for illustrative purposes only. The results do not reflect the impact of taxes and investment fees, which, if included, would have reduced the results shown. The results do not represent the performance of any T. Rowe Price mutual fund. It is not possible to invest direclly in an index.
Read The Study
1 The study spanned the 20 years up to the end of December 2017 for older funds or since inception for newer funds. It covered 18 diversified active U.S. equity funds currently advised by T. Rowe Price, including two institutional portfolios that are not directly available to individual investors. In instances where a portfolio manager managed multiple funds in a particular sub-asset class style (e.g., U.S. small-cap growth), we used only the strategy with the largest assets under management to avoid double counting. Benchmarks included the S&P 500, Russell 1000 Growth, Russell 2000 Growth, Russell 1000 Value, Russell 2000 Value, Russell 2000, Russell Midcap Growth, and Russell Midcap Value Indexes. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell indexes. Russell® is a trademark of Russell Investment Group.
2 Investment staff as of 12/31/2017. Includes 104 portfolio managers, 24 associate portfolio managers, 148 investment analysts, 47 associate analysts, 10 multi-asset specialists, 3 specialty analysts, 2 strategists, and 17 senior managers.
3 As of 12/31/2017.
This material, including any statements, information, data, and content contained within it and any materials, information, images, links, graphics, or recording provided in conjunction with this material are being furnished by T. Rowe Price for general informational purposes only. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price. The material does not constitute a distribution, an offer, an invitation, a recommendation, or a solicitation to sell or buy any securities in any jurisdiction. The material has not been reviewed by any regulatory authority in any jurisdiction. The material does not constitute advice of any nature, and prospective investors are recommended to seek independent legal, financial, and tax advice before making any investment decision.
Past performance is no guarantee of future results. All funds are subject to market risk, including possible loss of principal. There is no guarantee T. Rowe Price funds will outperform their benchmarks.
T. Rowe Price Investment Services, Inc., Distributor