T. Rowe Price Capital AppreciationPRWCX

Morningstar Rating

Fund Research and Analysis

by Greg Carlson

T. Rowe Price Capital Appreciation has been bolder and more volatile lately, but its charms are intact.

This fund has had a bumpy ride lately--more than we expected in the midst of equities' turbulence. It dropped 41% during stocks' sharp decline between Oct. Read more

Kudos

Consistently executed strategy.

Moderate risk.

Flexible asset-allocation mandate.

Current skipper has posted excellent relative results thus far. Read more

Risks

The fund's previous veteran skipper retired in June 2006, and one of his two replacements left the fund in 2007.

Can lag dramatically when growth leads the market.

A more equity-heavy stance than usual hurt the fund in the bear market. Read more

Strategy

David Giroux continues to retain the approach of predecessor Steve Boesel. Roughly 60% to 70% of the portfolio is filled with stocks that management thinks have been overly punished by the market. It favors names with relatively high yields and cheap valuations. Read more

Management

David Giroux has run this fund since June 2006. Jeff Arricale, his comanager at the outset, departed in June 2007 to take over T. Rowe Price Financial Services PRISX. Giroux served as an analyst at T. Rowe for seven years and covered industrial stocks, one of the most prominent sectors in the portfolio. Read more

Inside Scoop

This fund holds stocks, bonds, and convertibles. It specializes in finding opportunities among stocks that the market has overly punished for various reasons. Its previous manager, Steve Boesel, stepped down in June 2006 in favor of two newly promoted T. Read more

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