2024-07-16 00:33:49 ET
Summary
- T. Rowe Price has faced challenges with underperformance and outflows in major equity funds, leading to a sell recommendation last fall.
- Recent positive turnaround in AUM growth driven by successful performance of active ETFs and strategic expansion of product offerings.
- Anticipated Federal Reserve interest rate cuts are expected to benefit T. Rowe Price's bond funds and provide a boost to the firm's prospects, making it a now a buy.
Investment Thesis
Last fall, I rated T. Rowe Price ( TROW ) as a sell given that their active funds have had consistent underperformance to benchmarks, leading to outflows of Assets Under Management ((AUM)) as a result. The company has been struggling to counter the underperformance of their major equity funds that led to substantial net outflows. Notable funds such as Blue Chip Growth, Growth Stock, and Mid-Cap Growth have lagged behind their benchmarks over the past three to five years, and contributed to over $30 billion in net outflows in 2022 alone....
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For further details see:
T. Rowe Price: Low Interest Rate Play (Rating Upgrade)