Morningstar - Q1 2023 - 64

Investors
T. Rowe Price Dynamic Credit RPELX
Growth of $10K
$12K
11
10
9
8
01/2020
Morningstar Category
Morningstar Rating
Expense Ratio (%)
12/2022
Nontraditional Bond
QQQQQ
0.56
Source: Morningstar Direct. Data as of Dec. 31, 2022.
Morningstar US
Small Growth
T. Rowe Price
Dynamic
Credit
10.90
Morningstar
Global Core
Bond
8.51
NPSGX
13.29
9.96
for the average multisector bond fund, and 17.4%
for the Morningstar Global Core Bond Index.
" Most assets in credit with a long credit bias are
down double digits, " Sud notes, " but we captured
some active short alpha. "
Liquid alternative strategies should be approached
with caution. Complicated processes don't
always perform as expected, and they often come
with a hefty fee. In this case, a T. Rowe Price
pedigree ensures relatively low expenses-0.56%
for the fund's institutional shares. That's
reasonable for any actively managed fixed-income
fund, and particularly so for a nontraditional
bond fund with a relatively small asset base.
Then there's the backing of T. Rowe Price's
reputation and resources. While the firm
made its name as an equity shop, its fixed-income
assets under management had grown to
nearly $260 billion as of September. Most of
its fixed-income funds that are rated by
Morningstar's analysts are Morningstar Medalists.
While Sud is the sole named manager on
the Dynamic Credit strategy, he is an active part
64
Morningstar Q1 2023
of a bigger research team that includes managers
and analysts from across T. Rowe Price's
fixed-income shop.
" You need expertise across all these subsectors, "
he says. " To be successful, you need a teamoriented
approach. "
That broad perspective had led Sud to
take a defensive stance going into 2022 that
buffered Dynamic Credit from the worst.
" We have a global team that is looking
at global opportunities, " he says. In late 2021,
the team observed that the Czech central
bank and other more " orthodox " institutions
were starting to respond aggressively
to inflation-and anticipated a similar response
in the U.S.
The Road to T. Rowe
Sud didn't take a conventional path to asset
management. He received an electrical
engineering degree at the Indian Institute of
Technology in Delhi. " I had an analytical
mind, but unfortunately, I don't think engineering
was my calling, " he says.
He gave up his first engineering job when
hired by Lehman Brothers, which was setting up
an offshore unit in Mumbai in 2006. " I had
to tell my parents that I was going to take a 30%
pay cut to join this financial firm that
they'd never heard about, " he laughs. " And a
few years later, no one heard about it anymore! "
But his job pricing equity exotic derivatives
set him on his current path.
Sud moved on to Deutsche Bank in 2008,
working on rates trading and structuring. " That
was when I started reading Bill Gross' outlook
every month, " he says. He decided to pursue an
MBA and explore the U.S. markets. While
at Columbia Business School, he did a summer
internship at Gross' Pimco-which he was
surprised to find was a six-hour flight away in
Newport Beach, California. " I thought that
everything 'Wall Street' was in New York City! "
Sud returned to Pimco after graduation in 2012
and remained until early 2018, working on
U.S. and emerging-markets corporate credit.
" I was learning and getting mentored by
some of the best minds in the industry, " he says.
Morningstar - Q1 2023

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