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By Christine Benz and Katie Rushkewicz Reichart, CFA | 04-21-2016 12:00 AM

Are Manager Changes at T. Rowe Price Cause for Alarm?

Morningstar's Katie Reichart talks about the firm's recent manager changes, dramatic inflows into its target-date funds, and its new quantitative lineup.

Christine Benz: Hi, I'm Christine Benz for T. Rowe Price has recently seen a succession of manager changes which could have longtime investors in the firm's funds scratching their heads. Joining me to provide a recap of what's going on at the firm is Katie Reichart. She is a senior analyst with Morningstar.

Katie, thank you so much for being here.

Katie Reichart: Thanks for having me.

Benz: You've been our T. Rowe Price expert for several years, so I'm excited to have you here to talk about these manager changes that we've seen, talk about some of the flow trends that we've seen with a lot of concentration in the target-date lineup. But let's start with the manager changes. The most recent, kind of a surprise to me anyway, was hearing that Greg McCrickard was going to retire from the Small-Cap Stock fund. Let's start with that one and talk about what's going on there.

Reichart: Well, Greg McCrickard has run T. Rowe Price Small-Cap Stock for almost 24 years. He has had a great career at that fund and he is stepping back. He will still be around T. Rowe kind of mentoring some of the younger analysts. So, you see a retirement like that, it is a loss for shareholders. He was very experienced and did a good job.

Benz: I'm a shareholder.

Reichart: And at the same time though you think, well, you're going to see some of these managers approaching retirement age and it's going to happen at one point or another. So, we saw Frank Alonso, who is associate portfolio manager there since 2013, be named successor. So, you see a little continuity there. We did downgrade the fund to Neutral though, just as we kind of see how Frank Alonso makes the transition.

Benz: So, he has not run a diversified portfolio up until now?

Reichart: He has run a small- and mid-cap portfolio for non-U.S. investors and he has had good results there. He has only run that since about 2013, so relatively short amount of time and so not quite a pure small-cap focus. And he is also taking on a lot more in assets here, a strategy of over $10 billion in assets.

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