T. Rowe Price New Horizons Fund (PRNHX)
Ticker Symbol:
PRNHX
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 03/31/2014

Small-cap stock indexes recorded modest gains in the first quarter that paled in comparison with last year's strong returns. Small-cap value stocks easily outperformed growth equities. Although the Russell 2000 Growth Index posted a 0.48% return for the quarter, a sharp decline in small-cap growth stocks in March almost offset gains from January and February. The performance difference between growth and value was particularly pronounced in March - the Russell 2000 Growth Index declined 2.46% in the month, while the Russell 2000 Value Index advanced 1.24%. Many of the small-cap growth stocks that experienced the most selling pressure in March were the companies that posted the most impressive gains in 2013.

The New Horizons Fund returned 1.71% in the quarter compared with 0.48% for the Russell 2000 Growth Index and −0.47% for the Lipper Small-Cap Growth Funds Index. For the 12 months ended March 31, 2014, the fund returned 33.71% versus 27.19% for the Russell 2000 Growth Index and 25.59% for the Lipper Small-Cap Growth Funds Index. The fund's average annual total returns were 33.71%, 30.53%, and 12.04% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.80% as of its fiscal year ended December 31, 2012.

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 slightly 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.

The March sell-off in small-cap growth equities helped moderate what we viewed as the extreme valuations in the asset class after last year's rapid price increases. It's certainly possible that similar price adjustments will continue throughout this year as investors bring valuations down to be more in line with historical standards. In this environment, applying rigorous research to identify cases in which a company's stock price underestimates its earnings potential will be essential in attaining superior long-term returns in small-cap growth shares.

See Glossary for additional details on all data elements.