Morningstar Magazine - February/March 2018 - 51

Solid Gold
Behind this fund's success is an experienced manager
backed by a deep analyst bench.
BEST IDEAS: MANAGER

Katie Rushkewicz Reichart

T. Rowe Price Institutional Large Cap Core Growth TPLGX

This article is adapted from the fund's Morningstar Global Fund Report dated
Dec. 15, 2017.

Stats 12/31/2017

T. Rowe Price Institutional Large Cap Core Growth TPLGX boasts a long-tenured
manager who has consistently executed a sound approach. The fund receives
a Morningstar Analyst Rating of Gold.

Morningstar Analyst Rating
Œ

Morningstar Category
Large Growth

Expense Ratio
0.57%

Fee Level
Below Average

5-Yr Annlzd Return
18.90%

5-Yr % Rank in Cat
5

Morningstar Pillars 12/31/2017

Larry Puglia has run the retail version of this fund since 1993. He looks for firms
with above-average, durable growth prospects, strong free cash flow, and
management that allocates capital well. While the fund is well diversified, it
does make bigger bets on dominant franchises with strong runways for growth.
Sizable stakes in Amazon.com AMZN, Facebook FB, and Alphabet GOOG
have boosted results versus its Russell 1000 Growth Index benchmark in recent
years. Yet the fund hasn't simply ridden the coattails of a few standouts. Out-ofbenchmark bets on Chinese Internet companies Alibaba BABA and Tencent
TCEHY have paid off, particularly for the year to date through November.

Process
∞ Positive

Performance
∞ Positive

People
∞ Positive

Parent
∞ Positive

Price
∞ Positive

Growth of 10K 12/31/2017

$18K
15.37

T. Rowe Price Instl Large Cap Core Growth

14.3812
Morningstar US Large Growth Index
6

T. Rowe Price's well-regarded analyst bench-especially its perennially strong
tech and media/telecom teams-is the driver behind many of the fund's
successful picks. Puglia has run the strategy alongside various iterations of the
analyst team during his 24-year tenure, effectively using its research to post
consistently strong results, even in periods where the team has seen turnover.

While there is some key-person risk given Puglia is in his late 50s, T. Rowe
has a strong track record of handling manager transitions. Finally, the fund's
competitive expenses are a built-in, ongoing advantage over peers. K
Katie Rushkewicz Reichart, CFA, is director, equity strategies, with Morningstar
Research Services.

01/2016

01/2017

Morningstar Style Box 9/30/2017
Micro Small Mid Large Giant

Indeed, the fund is a strong contender through any lens. The fund's 10.6%
annualized gain since its 2003 inception through November beats the
benchmark's 10%. It hasn't fallen victim to the trend of lagging passive options,
either. The fund has beaten the benchmark during the trailing one-, three-,
five-, and 10-year periods through November while landing in the large-growth
Morningstar Category's top decile in each period. It can be vulnerable in
market dips, such as the market pullback from July 2015 to February 2016.
It has a lot riding on Internet-related names, which could prove bumpy if that
group sells off. But its long-term risk-adjusted results are impressive.

0
01/2015

Morningstar Ratings 12/31/2017

Fund Centroid
weighted avg. of Period
equity holdings
3-Yr

Mstar
Return

Mstar
Risk

High

Above Avg QQQQQ

Zone
75% of fund
equity holdings

5-Yr

High

Above Avg QQQQQ

10-Yr

High

Above Avg QQQQ
QQQQQ

Overall Rating

Deep Core Core Core High
Value Value
Grwth Grwth

Mstar
Rating

Top 5 Sectors 9/30/2017

Sectors

■ Fund

❙ Category Average

a Technology

3-Yr. High 3-Yr. Low

28.65

t Consumer Cyclical

16.47

d Healthcare

15.51
13.08

y Financial Services
p Industrials

30.58

23.93
17.32
16.36

9.74 9.87

28.65

20.61

26.37

23.93

25.93

15.76

16.36

10.14

11.40

9.74

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