Christopher Franz: We recently upgraded T. Rowe Price New Horizon's Morningstar Analyst Rating from Silver to Gold due to its ability to remain a superb long-term option despite a massive asset base.
The fund's success is due to manager Henry Ellenbogen's unique approach. As T. Rowe's CIO for U.S. Equity Growth, Ellenbogen works closely with the firm's analyst team to build an eclectic portfolio. While he anchors the fund in steady, long-term growers such as Vail Resorts and Burlington Stores, Ellenbogen sets the fund apart by also investing in promising, private companies before they go public. He's had considerable success here, but limits the fund's overall private stake to 5% to keep risk in check.
Ellenbogen is patient with his picks, and his willingness to hold on to industry disrupters has pushed the fund's average market cap upward, recently landing it in the mid-cap growth Morningstar Category. The fund's size is worth noting, and at nearly $24 billion, it's one of the largest actively managed strategies in both the small- and mid-cap growth categories.
Still, there's no denying Ellenbogen's success, highlighted by a banner year in 2018, as the fund gained ground while its index and peer group lost value. The fund is closed to new investors, but those with access to this great manager should stay put.