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T Rowe Price Equity Index 500 Portfolio to be liquidated

TheShadowTheShadow
in Fund Discussions
https://www.sec.gov/Archives/edgar/data/918294/000174177323003563/c497.htm

497 1 c497.htm

FOR EXP STAT AND SUMMARY STICKER 10-26-23


T. Rowe Price Equity Index 500 Portfolio

Supplement to Prospectus and Summary Prospectus dated May 1, 2023

At a Board meeting held on October 23, 2023, the fund’s Board of Directors approved the liquidation and termination of the fund. The liquidation is expected to occur on April 26, 2024 (“Liquidation Date”). Prior to the Liquidation Date, the assets of the fund will be liquidated at the discretion of the fund’s portfolio management and the fund will cease to pursue its investment objective. In anticipation of the liquidation, effective April 12, 2024, the fund will be closed to new insurance providers or existing shareholders to purchase fund shares. After the fund is liquidated, the fund will no longer be offered to shareholders for purchase.


The date of this supplement is October 26, 2023.

E308-041 10/26/23





Comments

  • msf
    Not too surprising. Given its relatively high ER (currently 0.20%), the only raison d'être I could ever see for this fund was as a convenience for T. Rowe Price investors.

    Some may not have wanted to open an account elsewhere for a cheaper S&P 500 fund. And until recently (2021) one couldn't invest in an S&P 500 ETF commission free using TRP's brokerage.
  • rforno
    edited October 2023
    msf said:


    Some may not have wanted to open an account elsewhere for a cheaper S&P 500 fund. And until recently (2021) one couldn't invest in an S&P 500 ETF commission free using TRP's brokerage.

    Not until 2021? Sheesh, that's incredible. But then again, they make their $$$ from fees, so it's understandable, if not necessarily helpful.

    I wonder if that Rydex S&P500 passive index mutual fund is still available -- the one with like a 1.5% ER. *shakes head* Wouldn't surprise me to see it is, and that there are people likely still being put into it by advisors or managers.
  • yogibearbullyogibearbull
    edited October 2023
    This looks like Price Equity Index 500 PORTFOLIO that is offered via insurance products. AUM is $26.8 million only and ER is 39 bps.
    https://markets.ft.com/data/funds/tearsheet/summary?s=0P00003DWI

    https://www.troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/equity-index-500-portfolio.html

    Unless I am mistaken, NOT affected are regular Price Equity Index FUNDs (AUM $25.3 billion) in classes PREIX (20 bps), PRUIX (5 bps), TRHZX (5 bps). Now, if Price liquidated those, that would be market moving news.

    There are many low-cost SP500 ETFs now, SPLG (2 bps; newer), IVV (3 bps), VOO (3 bps), another from S&P SPY (9 bps; older).
  • BaluBalu
    edited October 2023
    If this is a retail product, one never thinks about having to trigger gains from owning an S&P 500 fund. This could suck for the owners. I am surprised TRP is willing to take a risk of coming across as insensitive to investors by not pursuing alternate means of not triggering gains.

    How much AUM is in it?


    I now see Yogi’s post - I take too long to draft my posts. While I was drafting mine, 2 more posts came in. I am going to file the liquidation in the “no news” category until someone tells us how the liquidation adversely effects retail clients of TRP.
  • finder
    edited October 2023
    The total for all share classes is 25.3 B, according to M*. This will force me to think twice before buying TCAF.Thanks yogibearbull for the clarification
  • msf
    yogibearbull said:

    This looks like Price Equity Index 500 PORTFOLIO that is offered via insurance products. AUM is $26.8 million only and ER is 39 bps.
    https://markets.ft.com/data/funds/tearsheet/summary?s=0P00003DWI

    https://www.troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/equity-index-500-portfolio.html

    Unless I am mistaken, NOT affected are regular Price Equity Index FUNDs (AUM $25.3 billion) in classes PREIX (20 bps), PRUIX (5 bps), TRHZX (5 bps). Now, if Price liquidated those, that would be market moving news.

    @yogibearbull - thanks! I clearly read too fast.

    FWIW, the "ticker" that FT gives (0P00003DWI) can be used to coax a little info about the fund out of M*. If you use it as the ticker in a portfolio, you can "analyze" the portfolio. However, there is no direct fund info on insurance (annuity) products at M*. At least none I can find.
  • yogibearbullyogibearbull
    Price itself has this on its "financial intermediary" mini-site (see link earlier)
    https://www.troweprice.com/literature/public/country/us/language/en/literature-type/prospectus/sub-type/vip?productCode=EXP&currency=USD
  • CrashCrash
    For reference: PREIX.
    https://www.morningstar.com/funds/xnas/preix/quote
  • Sven
    edited October 2023
    Took too long to kill off this expensive index fund, whereas their competitors are changing only several base points.

    Edits: This is a tough place for T. Rowe Price to compete against BlackRock and Vanguard for their ultra low ERs. Either TRP follows Fidelity’s approach of subsidizing their index funds and makes up from other actively managed products, there are few choices.
  • hank
    edited October 2023
    Hope this hasn’t already been covered, but don’t some of TRP’s allocation funds (like TRRIX) invest in this? Perhaps they have an institutional share class that won’t be affected?

    OK / I should have read full thread. Looks like TRP is “disappearing” just one of several classes of the fund.:)
  • hank
    edited October 2023
    Sven said:

    Took too long to kill off this expensive index fund, whereas their competitors are changing only several base points.

    You haven’t heard of P.T. Barnum?
  • yogibearbullyogibearbull
    edited October 2023
    I still see some confusion.

    The fund being closed (QAAGTX) is an insurance product (a separate account). Filing is because the SEC also regulates VAs, VLIs, etc. See this from its prospectus:
    "Purchase and Sale of Fund Shares
    The fund is not sold directly to the general public but is instead offered as an underlying investment option for variable annuity or variable life insurance contracts. Although the fund does not require a minimum amount for initial or subsequent purchases from
    insurance companies, your insurance company may impose investment minimums for your purchases of the fund."

    It has nothing to do with the regular mutual fund PREIX / PRUIX / TRHZX. QAAGTX isn't even a class of these OEFs.
  • TheShadowTheShadow
    Sorry for the confusion; the symbol for the fund in question is QAAGTX.
  • CrashCrash
    ah, ok then.
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