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 03/31/2015

In the first quarter of 2015, small-cap growth stocks extended their rally that began late in 2014. The Russell 2000 Growth Index gained more than 6% for the quarter, outpacing the returns of large- and mid-cap equities as well as small-cap value companies. At least some of the outperformance of small-caps relative to large-caps likely stemmed from the recent rapid strengthening in the dollar. Small-cap companies are less reliant on revenue from foreign markets than large-caps. In addition, small-caps benefitted from the strength of the biotech industry and their more limited exposure to falling oil prices.

The New Horizons Fund returned 6.40% in the quarter compared with 6.63% for the Russell 2000 Growth Index and 5.74% for the Lipper Small-Cap Growth Funds Index. For the 12 months ended March 31, 2015, the fund returned 10.99% versus 12.06% for the Russell 2000 Growth Index and 8.34% for the Lipper Small-Cap Growth Funds Index. The fund's average annual total returns were 10.99%, 20.72%, and 12.42% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. 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

Our bottom-up investment process focuses on picking individual stocks, which drives the portfolio 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. Information technology and health care are the portfolio's largest sector allocations; technology exposure is roughly equal to that of the benchmark, while the portfolio is underweight health care. The next-largest allocation is to the consumer discretionary sector, where the portfolio has a significant overweight compared with the benchmark.

The recent rally in small-cap growth stocks puts the asset class closer to the extended valuation levels we saw after its rapid price appreciation in 2013. Therefore, we are cognizant that a period of price adjustment could occur that would bring valuations down to be more in line with historical standards. On the positive side, the U.S. economy appears capable of expanding at a healthy rate, even with subpar growth abroad. 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.