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  • T. Rowe Price New Horizons Fund (PRNHX)
    Ticker Symbol:
    Fund Status:
    Closed to new Retail investors  /  Open to subsequent Retail investments
    Closed to new Retail Investors as of December 31, 2013 at 4pm EST
    Fund Management
    Fund Manager
    • Henry Ellenbogen
    • Managed Fund Since: 03/01/2010
    • Joined Firm On 04/16/2001*
    • A.B. Harvard College (magna cum laude); J.D., Harvard Law; M.B.A. Harvard Business School (Baker Scholar)

    *Firm refers to T. Rowe Price Associates and Affiliates
    Quarterly Commentaries
    as of 06/30/2014

    After a stumble in early April, U.S. small-cap growth stocks recovered and posted positive returns for the second quarter. However, small-cap performance significantly lagged the returns of mid- and large-cap equities. Within the small-cap stock segment, value shares slightly outperformed growth stocks as the Russell 2000 Value Index returned 2.38% versus the 1.72% return of the Russell 2000 Growth Index. U.S. economic data released during the quarter were mixed, while the Federal Reserve continued to taper its bond purchases in regular increments and started to prepare markets for eventual interest rate increases.

    The New Horizons Fund returned 1.34% in the quarter compared with 1.72% for the Russell 2000 Growth Index and 0.52% for the Lipper Small-Cap Growth Funds Index. For the 12 months ended June 30, 2014, the fund returned 28.08% versus 24.73% for the Russell 2000 Growth Index and 21.74% for the Lipper Small-Cap Growth Funds Index. The fund's average annual total returns were 28.08%, 26.14%, and 12.22% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2014. The fund's expense ratio was 0.80% as of its fiscal year ended December 31, 2013.

    For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
    Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary and you may have a gain or loss when you sell your shares.

    Benchmark Definitions

    Information technology and consumer discretionary continue to be the portfolio's largest sector allocations, although it is underweight information technology and significantly overweight consumer discretionary relative to the benchmark index. However, our bottom-up investment process focuses on picking individual stocks, which drives sector allocations. We strive to select companies that are either early-stage innovators with the potential to grow from the small-capitalization category into large-caps, or that are firms that can durably grow over time as a result of the advantages of scale, a new technology, or an ability to increase efficiency in their markets.

    Small-cap growth companies remain close to the extreme valuation levels (as measured by price/earnings ratios and other data) that T. Rowe Price portfolio managers saw in the asset class after its strong gains in 2013 and the beginning of 2014. We are wary of a more prolonged period of price adjustment that would bring valuations down to be more in line with historical standards. Particularly in this environment, thorough company analysis is an essential element of successful small-cap growth investing. We remain confident in our ability to find smaller companies that are poised to grow rapidly and to hold them for the long term, even through the downturns and valuation adjustments that are part of every market cycle.

    See Glossary for additional details on all data elements.