A Hall of Fame Manager Guides This Balanced Fund

Key Morningstar Metrics for T. Rowe Price Capital Appreciation

• Morningstar Medalist Rating: Gold
• Process Pillar: High
• People Pillar: High
• Parent Pillar: High

David Giroux and team have earned a well-deserved reputation as one of the leading investment teams managing money for individual investors.

Giroux has helmed T. Rowe Price Capital Appreciation PRWCX since mid-2006. Over that time, he has displayed an innate ability to invest opportunistically across equities and bonds, capturing pockets of value through strong stock selection and impressively timed shifts between stock and bond exposure. His execution of this strategy’s nimble, contrarian approach has delivered topnotch returns for investors. Over his tenure from June 2006 through August 2025, he’s outpaced all peers in the moderate-allocation Morningstar Category on both an absolute and risk-adjusted basis (as measured by Sharpe ratio). The institutional share class’ nearly 10% annualized return was also within reach of the S&P 500’s 11% return over that period, with significantly less volatility.

Although Giroux has been the main attraction, he’s not running this strategy on his own. On June 30, 2025, Vivek Rajeswaran, Brian Solomon, and Mike Signore became comanagers alongside Giroux. All three have been associate portfolio managers on the team since 2023 and longtime analysts contributing to the stock selection and management of T. Rowe Price Capital Appreciation; they were also named as comanagers on the team’s other products, reflecting their meaningful contributions to the investment process. The promotions are not an indication that Giroux plans to step back anytime soon.

Giroux and his team run a concentrated portfolio of about 50 stocks, representing 60%–70% of the fund’s assets. They adjust exposures when they see opportunities. For example, adding to equities during market downturns when valuations become more attractive. Giroux has applied this approach consistently, most recently during the April 2025 market pullback. These moves can be early, sometimes causing sharper short-term losses, but they have added value over the long run. Stock exposure rarely falls below 60%, as the team has more conviction in spotting market bottoms than tops.

Within the stock portfolio, the team targets companies expected to grow earnings faster than peers over the next five years while still trading at reasonable valuations. It’s a common approach, but the team’s execution of the strategy has been consistently excellent. Compared with competitors, T. Rowe Price Capital Appreciation typically leans more heavily on technology, healthcare, and utilities. The utilities may seem out of place, but they provide defensive balance when markets turn volatile.

T. Rowe Price Capital Appreciation: Performance Highlights

Giroux’s track record continues to set a high bar.

T. Rowe Price Capital Appreciation’s institutional share class outpaced all peers in the moderate-allocation category from Giroux’s June 2006 start through August 2025 and beat the Morningstar Moderate Target Risk Index category benchmark by 3.5 percentage points annualized. Even more impressive, the fund’s 9.7% annualized return is within range of the S&P 500’s 11.0% return, also delivering significantly better risk-adjusted results as measured by Sharpe ratio.

The fund’s returns haven’t only been high relative to peers; they’ve also been remarkably consistent. T. Rowe Price Capital Appreciation has finished in the top half of its category every full calendar year under Giroux, thanks to a combination of savvy stock picks and deft allocation shifts. In 2025, the fund’s 9.65% return through August 2025 falls just below the category average return of 9.76%. The rare underperformance versus its rivals is somewhat explained by the fund’s relatively lower exposure to non-US stocks. The fund rarely owns more than a few stocks outside the US, but the average peer has a 6% allocation. Through August 2025, non-US stocks had a return of more than 20%, about double the return of US stocks. Some healthcare picks like UnitedHealth Group UNH and Becton Dickinson BDX have weighed on returns, too.

Despite modest headwinds in 2025, Giroux’s disciplined approach and long record of excellence suggest T. Rowe Price Capital Appreciation remains well-positioned to continue delivering competitive returns with superior downside protection.