The Investors Choice for a Fund-Only Portfolio
Baltimore based T.Rowe Price has a reputation for high quality and low-cost mutual funds delivering exceptional returns in the long run. T. Rowe Price is known for its financial planning services and tools for investment-related financial decisions. It was founded in 1937. The firm offers services in personal investing, workplace retirement programs, insights and local relationship management teams for institutional investors, financial advisory, retirement plan strategies and institutional consultants. T. Rowe Price has handled over $1 trillion for institutional and individual investors in the United States.
An Investment Powerhouse with Multiple Offerings
T. Rowe Price is known for its target-date funds which depending on the retirement timeline are either for growth or preservation. For corporate employers, the firm manages 401k plans. Approximately two thirds of the Assets Under Management is actively managed for retirement accounts. T. Rowe Price also has an online trading facility for investors for which it offers discounted brokerage services. The tradable securities they can invest in are:
- Mutual Funds
- No-fee exchange-traded funds (ETFs)
Which Investors T. Rowe Price Is Ideal For?
Investors who wish to outperform the trading market without having to choose individual schemes should certainly consider T. Rowe Price funds. Over a decade, more than 90% of the stock funds of the company outperformed basis cumulative return if you look at Lipper averages. Also, for an actively managed fund, brokerage fees can be removed.
T. Rowe is not meant for those who wish to trade frequently because of the high trading costs and the minimum balance that has to be maintained to invest. The timely in-depth stock information is not available as part of its services and the site’s tools are not designed to help self-directed investors.
What You Can Expect at T. Rowe Price
Low Cost and High-Quality Funds
These are a defining part of T. Rowe Price. A fund’s expense ratio is impacted by the returns. On July 2019, 65 of T. Rowe Price funds have got 4/5 Overall Morningstar ratings.
No-Load Mutual Funds
T. Rowe has about 130 of such funds. This keeps in line with the vision of their founder Thomas Rowe Price Jr who said that fees should be based on assets under management and not deducted as a commission.
No Transaction Fees
The firm also has 3000 no-transaction-fee mutual funds as well as 300 commission-free Exchange-traded funds.
You can access T. Rowe’s own funds which means you can bypass the hidden charge, markups and brokerage fees.
T. Rowe Mutual Fund Research Tools
These are particularly noteworthy in sorting funds basis ranking and family. It also offers research basis price, management and objectives. This makes financial planning a lot easier. Their retirement tools which are for free to the public tells the retirement income you need and the overall health of your savings. For example, the retirement calculator forecasts rental income based on current savings along with other factors. Another tool is the FuturePath which is a simulator that can be customized to include say future gains, revenue streams, or expenses like college tuition cost. It performs the same analysis using the standard inputs like current income, savings and other parameters using Monte Carlo analysis to provide accuracy and probability in achieving financial targets.
A Rich History and a Reputation Of Stability with Performance
The firm’s 80-year old history has made it a favourite company in Fortune. T. Rowe Price is a part of the Financial Industry Regulatory Authority (FINRA) which regulates and oversees broker activity. It is also a member of Securities Investor Protection Corporation (SIPC) which provides a protective cover of $500,000 in case of brokerage failure. In the case of client accounts, $ 1.9 million is the limit for cash awaiting reinvestment. Apart from this, a two-step authentication for logins is part of its security checks and the industry compliant standard security encryption is also available for all accounts.
- Low-cost mutual fund
- Screening tools for funds
- Free investing tools
- Commissions are expensive
- Need to maintain a minimum account balance of $2,500
The Final Verdict
T. Rowe Price stands out for its fund only portfolio. Their mutual funds are the best in the industry. It is highly recommended for mutual funds primary investors for their low-expense-ratio funds which perform consistently at low cost.