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Morningstar downgrades T. Rowe’s Blue Chip Growth

Morningstar has lowered its analyst medal rating on the $78.9n T. Rowe Price Blue Chip Growth fund on the anticipated retirement of longtime manager Larry Puglia with the next two years.

The fund has been downgraded to Silver from Gold on all share classes except the most expensive R-share class, which fell to Bronze from Silver.

Despite the downgrade, the new silver rating is still a vote of confidence from Morningstar for Paul Greene, Blue Chip Growth’s associate manager. Greene has had good performance on the $8.6bn T. Rowe Price Communications and Technology fund from early 2013 through early 2020. Greene was named associate manager of Blue Chip Growth at the start of the year, making him the heir apparent.

Morningstar analyst Katie Rushkewicz-Reichert said Puglia hasn’t set an official retirement date, but the Chicago research firm is getting in front of Puglia’s eventual departure with its ratings change.

The biggest challenge for Greene, Rushkewicz-Reichert said, will be moving from managing less than $10bn in Communications and Technology to managing $100bn in Blue Chip Growth.

Morningstar’s qualitative analyst ratings are applied based on an analyst’s view of how much a chance the fund has to beat a relevant benchmark over the longer haul. In 2019, the firm began applying different ratings to different share classes of different fee structures to reflect the challenges high fees pose to this goal.

For the slightly more than 27-year period Puglia…

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