Powering Through Down Markets for Better Investor Results

Market downturns happen. If you’ve been investing for a while, you’ve probably experienced more than one. And if you are like most investors, you have lost money and found yourself waiting years for your investments to reach their previous levels.

T. Rowe Price U.S. equity funds have succeeded in dulling this financial pain for many investors, nearly always generating better returns than their respective benchmarks through down periods over the last 20 years.

We’ve achieved this strong performance through our active management approach, led by investment professionals who go after returns that are better than the index. We go beyond the numbers, applying rigorous research and prudent risk management to pursue more money for investors during bull markets, while trying to help investors come out strong on the other side of market downturns. History shows we’ve done just that with our U.S. equity funds.

Our U.S. equity funds have done well to beat indexes in both up and down markets. But their performance has especially stood out during prolonged periods when markets were down overall.

T. Rowe Price examined the performance of 17 U.S. equity funds between 2003 and 2023, specifically looking at five-year monthly rolling periods during that time. In those periods where benchmarks were positive, our U.S. equity funds performed better in 70% of cases. On the flip side, our funds performed better in 90% of the periods when benchmarks showed negative returns.

Down markets can hurt in the short term. But their effects can be felt for years because the larger the market drop, the more money you’ll need to get back to previous levels. (Consider, for example, that a 10% loss will require an 11.1% gain to break even, but a 50% loss will require a 100% gain.) That’s why it helps to try and limit losses during down markets by partnering with an investment manager with a history of success. T. Rowe Price investment professionals have managed portfolios through multiple market cycles and understand how to navigate through difficult periods. They know from experience that every dollar you can save during a market downturn is a dollar you can invest later, potentially resulting in more money for you over time.

Fortunately for investors, down markets historically have been less frequent and shorter in length than periods where markets have done well. But these drops, when they happen, can have a deep and long-lasting impact on investors’ portfolios. Consider two real-life examples of prolonged downturns in the past 25 years: the collapse of the tech sector in 2001 and the 2008–2009 global financial crisis.

During these two high-profile events, markets experienced double-digit negative returns, and many investors waited years to see their portfolios return to previous levels. Investors close to retirement felt the worst of the pain. But in five-year periods surrounding these events (2001 through 2005 and 2008 through 2012), T. Rowe Price U.S. equity funds were shown to have generated more money than a blended index of relevant benchmarks. This means that investors potentially saw meaningfully higher balances once markets recovered.

Down markets are inevitable, and it’s likely that you will experience periods of negative investment returns. But T. Rowe Price U.S. equity funds have reliably beaten their respective benchmarks through longer down markets and recovery periods of the last 20 years, helping to produce better results in the long run. That’s the power of the T. Rowe Price active management approach—deep experience, prudent risk management, and rigorous research in pursuit of the right opportunities for your long-term goals.

Call 1‑800‑225‑5132 or visit troweprice.com to request a prospectus or summary prospectus; each includes investment objectives, risks, charges, expenses, and other information that you should read and consider carefully before investing.