T. Rowe Price New Horizons Fund

Class No Load (PRNHX)
Scorecard
5 / 5 Stars
Lipper
5 5 4 5 2
Zacks Investment Research
2 (Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
C+ (Hold)

#3 in Small Growth

U.S. News evaluated 219 Small Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 28.08 percent over the past year, 19.36 percent over the past three years, 26.14 percent over the past five years, and 12.22 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 3.1%
1 Year 28.1%
3 Years (Annualized) 19.4%
5 Years (Annualized) 26.1%
10 Years (Annualized) 12.2%

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Summary

For investors looking to tap into the growth potential of America's smaller, lesser-known companies, T. Rowe Price New Horizons has long been a reliable choice.

As of July 03, 2014, the fund has assets totaling almost $15.08 billion. Its portfolio consists primarily of shares of small and mid-sized U.S. companies that, in management's view, offer significant room for growth.

Small-cap investors have been on a roller-coaster ride over the past few years. Traditionally, the stocks of small companies get hit hard during recessions and surge to the front of the pack during recoveries. True to form, this fund lost a painful 39 percent in 2008. But in 2009, it came rocketing back with a 44 percent gain. Last year, the fund continued to outperform, and it finished the year up 35 percent. Lately, the fund has been overweight to the technology sector. While technically a small-cap fund, roughly half of its portfolio is in mid-cap names. The fund has returned 28.08 percent over the past year and 19.36 percent over the past three years.

Historically, the fund has been a steady performer, in large part thanks to management's investing discipline. T. Rowe Price's seasoned analysts have long done a good job of drilling down into the fundamentals of small companies and finding diamonds in the rough. Since small companies often don't have much analyst coverage, isolating the best growth stories is easier said than done. The fund's low expense ratio has also helped investors. The fund has returned 26.14 percent over the past five years and 12.22 percent over the past decade.

Investment Strategy

The fund looks for companies that offer significant growth potential. The fund also looks to anchor its portfolio with a small group of companies that appear to be steady long-term performers. These are the fund's highest-conviction picks. The rest of its assets are in a broadly diversified mix of smaller companies; many of these bets may be a bit more speculative in nature. The fund holds a large number of companies.

Role in Portfolio

Morningstar calls the fund a "supporting player."

Management

Henry Ellenbogen has been the manager since March 2010. Previously, Jack Laporte had run the fund. Says Morningstar: "Although Ellenbogen had a solid record at T. Rowe Price Media & Telecommunications, he has big shoes to fill, as Laporte became one of T. Rowe's most respected managers in his 23 years with the firm and was a Morningstar Manager of the Year in 1995."

Fees

T. Rowe Price New Horizons Fund has an expense ratio of 0.80 percent.

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Risk

Like all stock funds, this one comes with some risks. Additionally, small-cap stocks can be more volatile than the broader market.  
 

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 1 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-06-11

The fund makes the list of Zacks Investment Research's "Top 5 T. Rowe Price Funds." Funds on the list are expected to outperform their peers in the future.

Zacks Investment Research 2010-05-05

In the annual Lipper/Barron's Fund Families Survey of 2009, T. Rowe Price ranks 2 out of 61 fund families surveyed. 

2010-08-26

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying: "On most fronts, this fund features strong stewardship, benefiting from a top-rate investment culture, low fees, a manager with skin in the game, and a spotless regulatory history."

Morningstar 2010-08-26

The fund makes the list of Zacks Investment Research's "Top 5 T. Rowe Price Funds." Funds on the list are expected to outperform their peers in the future.

Zacks Investment Research 2010-05-05

In the annual Lipper/Barron's Fund Families Survey of 2009, T. Rowe Price ranks 2 out of 61 fund families surveyed. 

2010-08-26

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying: "On most fronts, this fund features strong stewardship, benefiting from a top-rate investment culture, low fees, a manager with skin in the game, and a spotless regulatory history."

Morningstar 2010-08-26