Industry Voice: Navigating a Challenging Environment for Growth Stocks

T. Rowe Price's Portfolio Manager, Taymour Tamaddon discusses how they are positioned relatively defensively amid rate headwinds

clock • 3 min read
Industry Voice: Navigating a Challenging Environment for Growth Stocks

Key points

Large-cap growth stocks have struggled as Russia’s invasion of Ukraine has compounded interest rate and inflation fears.

Our price discipline led us to miss out on some of the market’s most highly valued stocks over the past couple of years but has been a tailwind recently.

We remain positioned relatively defensively as we expect growth stock valuations to move back more in line with longer-term averages.

While multiyear gains for large-cap growth stocks were fueled in part by innovation and earnings growth, a highly accommodative Federal Reserve and strong investor sentiment propelled segments of the market to extreme valuations. To date in 2022, many growth stocks have undergone a sharp correction driven by rising interest rates, inflation, and the Russian invasion of Ukraine.

T. Rowe Price has been investing in growth stocks since 1950, and our total large-cap growth equity assets under management exceed USD 343 billion (as of March 31, 2022).1 Our extensive U.S. small-/mid-cap and non-U.S. research and portfolio management resources further complement our large-cap growth investing activities. Our experience shows that companies positioned to exploit change are among the most durable growth investments.

Taymour Tamaddon's investment experience began in 2003, and he has been with T. Rowe Price since 2004. Prior to this, Taymour was employed by Amazon.com in the areas of finance and merchandising and was previously employed by Booz Allen Hamilton as a consultant. Taymour earned a B.S., cum laude, in applied physics from Cornell University and an M.B.A. from Dartmouth College, Tuck School of Business, where he was an Edward Tuck Scholar with high distinction.

In this Q&A, Taymour discusses the current environment for large-cap growth stocks, his outlook for the asset class, and how he is positioning the portfolio in response.

 

This post was funded by T. Rowe Price

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Key points

Large-cap growth stocks have struggled as Russia’s invasion of Ukraine has compounded interest rate and inflation fears.

Our price discipline led us to miss out on some of the market’s most highly valued stocks over the past couple of years but has been a tailwind recently.

We remain positioned relatively defensively as we expect growth stock valuations to move back more in line with longer-term averages.

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