Active management has been a key pillar of the asset management world for some time. As that space has grown, some funds have stood out specifically, like the T. Rowe Price Capital Appreciation Fund (PRWCX). According to T. Rowe Price’s analysis, the strategy has outperformed its Morningstar peer group average for 17 straight years. Understanding that fund a bit more could speak to how investors can approach active management at a critical juncture.
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Operated by award-winning manager David Giroux, the strategy offers an active multi-asset approach. The active fund generally invests at least 50% of its total assets in stocks and the other 50% in fixed income securities. That latter group includes mortgage and asset-backed securities and bank loans, per the fund’s summary from T. Rowe Price. What’s more, the strategy can, at times, invest up to 25% of its assets in foreign securities, but has historically focused mostly on domestic holdings.
That approach has helped the active fund return 10.5% over the last 10 years on an annualized basis, per T. Rowe Price data as of December 31. Charging only a 73 basis point (bps) gross fee, it also offered a 1.92% 30-day SEC standardized yield as of January 31.
While not the same strategy, investors can also consider an ETF managed by Giroux and team. The T. Rowe Price Capital Appreciation Equity ETF (TCAF ) charges a 31 bps fee to invest higher-quality stocks of U.S. large-cap firms. Using fundamental analysis, the fund also has the flexibility to invest in some firms of other capitalization levels.
TCAF has returned 20.9% over the last one-year period, per T. Rowe Price data as of December 31. Picking up significant AUM in recent years, the Giroux-managed ETF could appeal to those looking for a fundamentally driven active fund for 2025.
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