An experienced team oversees the T. Rowe Price Active Model Portfolio target-risk series. The team invests in line with the firm's asset-class views, but it constrains the lineup in order to simplify the product for advisors. Despite that, its toolkit is stocked well enough to support a Morningstar Analyst Rating of Bronze.
A sizable roster now stands at six portfolio managers, after T. Rowe hired fixed-income specialist Erin Garrett from SEI in July 2020. She and the rest of the team benefit from T. Rowe Price’s ample resources in multi-asset investing, which include a team dedicated to strategic asset allocation research led by Robert Panariello, another named manager on these models.
The series consists of eight portfolios spanning from 100% fixed-income to 100% equity. The team uses a static lineup of 13 actively-managed T. Rowe Price mutual funds to build each portfolio, capping the number of funds in each at nine. This is a smaller lineup than other T. Rowe Price multi-asset offerings--the firm’s target date series invests across 24 different strategies--which can hamstring the team’s ability to implement the firm’s best thinking. A more flexible approach that would enable the managers to access a broader range of asset classes and funds would bolster conviction in the approach.
An asset-allocation committee comprised of experts from across T. Rowe Price sets the tactical tilts for these models, though the limited lineup prevents the managers from implementing all of their ideas. The committee’s tilts have proven additive in funds with longer track records, and have added value to all but the 100% fixed-income portfolio over these models’ short two-year track record. Given the limited scope of the tilts, the performance of the underlying funds should drive any differentiation from peers. These funds are fairly well-regarded by Morningstar analysts, with five of the 13 receiving Medalist ratings, including four Silver-rated equity strategies.
Model portfolios only provide guidance; users must implement their suggested trades and rebalance on their own. Investors’ results will vary depending on how closely they follow this profile’s recommendations.
General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.