5 Top-of-the-Line T. Rowe Price Mutual Funds

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Colorado Springs, Colorado, USA - March 17, 2013: The entrance to the offices of T. Rowe Price in Colorado Springs. Founded in 1937, T. Rowe Price is a major financial advisory firm.
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T. Rowe Price (TROW (opens in new tab)) employs more than 600 investment professionals who manage nearly $1.1 trillion for investors in 49 countries. But when you visit the Baltimore headquarters, you still get a feel of the firm as a small, collegial group that enjoys working together.

The secret to T. Rowe Price’s success, in my view, is its sterling corporate culture. This is a company with character. The average investment pro has 22 years of experience; many remain with T. Rowe for their entire careers. All this – plus the products’ above-average long-term returns and below-average expense ratios – makes T. Rowe mutual funds a good choice for investors.

The firm was launched in 1937 by Thomas Rowe Price Jr., who had a novel idea (at the time) that buying growth stocks – those with rising earnings and revenues – could be just as successful as value investing, which was ascendant during the Great Depression that followed the 1929 stock market crash.

The theory was sound, but the timing was awful. The T. Rowe Price investment firm didn’t turn a profit until 1950 – the same year that it launched its first mutual fund, T. Rowe Price Growth Stock (PRGFX (opens in new tab)). The firm subsequently broadened its scope to include value stocks, foreign stocks and small-cap stocks, as well as bond funds. Since then, it has done quite well indeed.

Do you think index funds are the only way to invest? T. Rowe begs to differ. Indeed, 79% of its U.S. equity funds beat their benchmark over the past 10 years.

But which are the best T. Rowe Price mutual funds on offer? Here are my thoughts.

Data is as of June 18, unless otherwise noted. Three- and five-year returns are annualized. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.