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T Rowe Price launches three new quantitatively managed stock funds


T Rowe Price has introduced three new equity funds that use a quantitative management style to select the stocks they hold. The new funds are: T Rowe Price QM U.S. Value Equity Fund, T Rowe Price QM U.S. Small & Mid-Cap Core Equity Fund, and T Rowe Price QM Global Equity Fund.

In addition, the company has renamed the T Rowe Price Diversified Small-Cap Growth Fund as the T Rowe Price QM U.S. Small-Cap Growth Equity Fund to better reflect its quantitative management style. All four funds are a part of the new T Rowe Price Quantitative Management (QM) series and are available in Investor Class, Advisor Class, and I Class shares.

While T Rowe Price is well known and respected for its fundamental research capabilities, the company has also developed a quantitative research program and has managed strategies with a quantitative focus and process for the last 10 years. Designed for long-term investors, the QM funds aim to deliver capital growth through the use of systematic, data-driven stock-selection models. These proprietary models analyse a multitude of fundamental metrics drawn primarily from company financial statements. In this way, and through close collaboration among the company's investment professionals, T Rowe Price's quantitative research process is an effective complement to its longstanding strength in fundamental research.

T Rowe Price's quantitative investment approach is based on identifying stocks that are outperformers over multiple market cycles in most global markets. These tend to be stocks that are undervalued relative to industry peers and the broader universe. There is a preference for companies that earn high returns on capital employed and those with high earnings quality, in part because these companies often experience more moderate declines in down markets. Because of this value-oriented preference, it is possible that T Rowe Price's QM strategies could underperform in periods when valuation and quality characteristics are not rewarded by the market.

Sudhir Nanda, head of the Quantitative Equity Group at T Rowe Price and portfolio manager of the QM Global Equity Fund and the QM U.S. Small-Cap Growth Equity Fund, says: "The launch of these new funds signals T. Rowe Price's commitment to quantitative equity research. Collectively, our experienced quantitative team has spent many years developing models that have demonstrated an ability to identify stocks with a high probability of outperformance over market cycles. Avoiding potential underperformers is another important component that can help a fund beat its benchmarks over time, and our models are designed to help with that, as well.

"In addition to managing the QM funds, our quantitative team also provides analysis for use by our fundamental research investment professionals. Our groups collaborate well together and complement each other. Our quantitative strategies are not 'black box.' We use efficient, transparent, and systematic analysis of fundamental data to drive our investment decisions as we work to provide investors with relative outperformance in a persistent manner."

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