Video Reports

Embed this video

Copy Code

Link to this video

Get LinkEmbedLicenseRecommend (-)Print
Bookmark and Share

By Katie Rushkewicz Reichart, CFA | 06-26-2017 02:00 PM

More Than Dividends in This Large-Value Fund

While owning mostly dividend payers, a valuation screen limits Bronze-rated T. Rowe Price Equity Income's yield.

Katie Reichart: T. Rowe Price Equity Income receives a Morningstar Analyst Rating of Bronze. John Linehan took over in late 2015 after longtime manager Brian Rogers retired, but he's not new to the portfolio manager role. He posted good results at T. Rowe Price Value from 2003 to 2009 and is backed by a strong analyst team.

Linehan has stayed true to the fund's mandate since taking over. As expected, the fund owns mostly dividend payers, and its yield will generally be higher than the average large-value fund over time. But income isn't the only objective, and it won't necessarily be one of the highest-yielding funds around, since he also focuses on valuation.

Turnover is moderate, and the portfolio is generally well diversified across sectors, making it a good core holding. The fund holds less cash than it did at points in the past, which should allow stock-picking to shine through and give the fund a chance of holding up better in strong markets.

Indeed, the fund has outperformed the Russell 1000 Value Index since Linehan's start and turned in especially strong results in 2016. Costs are below average, helping the fund's case.

{1}
{1}
{2}
{0}-{1} of {2} Comments
{0}-{1} of {2} Comment
{1}
{5}
  • This post has been reported.
  • Comment removed for violation of Terms of Use ({0})
    Please create a username to comment on this article
    Username:
    Content Partners