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Key Words: ‘The equity market is rich here’ says top-ranked T. Rowe Price investment manager who is cutting his stock-market exposure

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‘The equity market is rich here at more than 20 times earnings for the next year and we have pulled back.’


— David Giroux

David Giroux, who has run T. Rowe Price’s Capital Appreciation fund since 2006, told the Financial Times (paywall) in a recent interview that he is cutting exposure to equities because he sees valuations as too rich.

The publication said the fund has cut its exposure from 70% in equities at the market nadir near the spring of 2020 to around 55%, presently, as stocks are aggressively bid higher and the S&P 500 index
SPX,
-0.31%

has produced its largest number of record closes a this point in a calendar year at 51, as of Wednesday, since 1995.

Giroux’s fund is up 13.5% so far in 2021, outstripping a number of peer investment funds.

By comparison, the S&P 500 has risen more than 19% so far this year, the Nasdaq Composite Index
COMP,
-0.26%

has gained nearly 17% and the Dow Jones Industrial Average
DJIA,
-0.26%

has climbed over 15% in the year to date.

Meanwhile, shares of publicly traded T. Rowe Price Group
TROW,
+0.07%

have outperformed the broader market, up nearly 45% so far this year, with a 7.5% gain in August thus far. That performance is better than the Financial Select Sector SPDR Fund
XLF,
-0.16%

of which T. Rowe is a component.

Deep Dive: These 20 ‘left behind’ stocks among the S&P 500 are expected to rise up to 59% over 12 months

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