Investment Objective
The Portfolio seeks to provide long-term capital growth through investments in the common stocks of large-cap growth companies.
Investment Strategy
The Portfolio invests substantially all its assets in the T. Rowe Price Large Cap Growth Separate Account. The T. Rowe Price Large Cap Growth Separate Account will normally invest at least 80% of its net assets (including any borrowings for investment purposes) in large-cap companies. The T. Rowe Price Large Cap Growth Separate Account defines a large-cap company as one whose market capitalization is larger than the median market capitalization of companies in the Russell 1000® Growth Index, a widely used benchmark of the largest U.S. growth stocks. As of December 31, 2020, the (unweighted) median market capitalization of companies in the Russell 1000® Growth Index was approximately $16.7 billion. The market capitalizations of the companies in the T. Rowe Price Large Cap Growth Separate Account’s portfolio and the Russell index change over time; the T. Rowe Price Large Cap Growth Separate Account will not automatically sell or cease to purchase stock of a company it already owns just because the company’s market capitalization falls below the median market capitalization of companies in the Russell index.
The T. Rowe Price Large Cap Growth Separate Account follows a growth-oriented approach to stock selection and expects to normally invest in stocks of approximately 100 to 150 companies. From a broad universe of about 1,000 large cap stocks, the T. Rowe Price Large Cap Growth Separate Account targets companies that, in the investment adviser’s view, are well established in their industries and have the potential for above-average earnings growth. The T. Rowe Price Large Cap Growth Separate Account focuses on companies with leading market positions, seasoned management, and strong financial fundamentals. The T. Rowe Price Large Cap Growth Separate Account may at times invest significantly in stocks of technology companies. The T. Rowe Price Large Cap Growth Separate Account’s investment approach reflects its belief that solid company fundamentals (with emphasis on strong growth in earnings per share or operating cash flow) combined with a positive industry outlook should ultimately reward investors with strong investment performance. Generally, the adviser seeks out companies with strong free cash flow growth, good balance sheets, high returns on capital, and above-average earnings growth and profit margins. The adviser makes an effort to avoid overpaying for a company’s growth prospects by examining a company’s stock valuation relative to its own history, its industry peers, and the overall equity market.
Once stocks are selected for inclusion in the T. Rowe Price Large Cap Growth Separate Account’s portfolio, the adviser monitors each company and may build positions carefully over time and scale back positions when the adviser believes valuations have become less compelling. The adviser will eliminate holdings for various reasons, including a loss of faith in management, a change in the adviser’s assessment of a company’s fundamentals, an overextension in share price valuations, or to replace stocks with potentially better investment opportunities.
While most assets will typically be invested in U.S. common stocks, the T. Rowe Price Large Cap Growth Separate Account may invest in foreign stocks in keeping with its objective(s).
Investment Risks
Active management, Consumer Related Companies, Cybersecurity Breaches, Foreign Investing, Growth Investing, Information Technology Sector, Large-Cap Stocks, Market Conditions, Sector Exposure, and Stock Investing. These risks are discussed under T. Rowe Price Investment Risks, per the disclosure booklet.
