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<<I always found it curious that the RM (then CK) portfolio would profess TROW
as a long-term investment while simultaneously professing a belief and suggesting
a means by which the individual investor can outperform the mutual fund
industry--the RP4, indexing, investing in RM & RB to name a few. IMHO, the
long-term prospects of mutual funds (other than one tracking the index) are
questionable given recent developments (discount brokers, online access to
information, fee awareness, underperformance etc.).>>

I would agree with this to an extent -- that is TROW may be a Cash-King, but under no stretch of the imagination could it be called a Rule Maker.

TROW is a tweener. At one time being a no-load mutual fund company was breaking the rules a bit, but it isn't any longer, and TROW sure ain't writing any of the rules. Vanguard is the Rule Maker plain and simple. (Vanguard took in as much new money last year as the next five biggest growers in the field. The mutual fund family competition is largely over already, it's just that not many are reporting it.)

Whither TROW? I don't know. It's a perfectly average mutual fund management company, significantly better than some, but overall with no real advantages. I've seen it ranked both above and below average by different systems, but there's nothing particularly interesting about its record. I would expect TROW to slowly drift nowhere over the next ten years. I certainly don't think that I see an exciting story going forward for it. Right now, the only thing T.Rowe funds really have going are lower costs than some others -- but ultimately it can't really compete with Vanguard. This is literally true by the way -- it can't compete with Vanguard which is a not-for-profit operation and will always be able to charge lower fees than the for profit TROW.

Bill
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