UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-07059
| T. Rowe Price Blue Chip Growth Fund, Inc. |
|
|
| (Exact name of registrant as specified in charter) |
| 100 East Pratt Street, Baltimore, MD 21202 |
|
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| (Address of principal executive offices) |
| David Oestreicher |
| 100 East Pratt Street, Baltimore, MD 21202 |
|
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| (Name and address of agent for service) |
Registrant’s telephone number, including area code: (410) 345-2000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2022
 |
Blue Chip Growth Fund |
June 30, 2022 |
| TRBCX | Investor Class |
| PABGX | Advisor Class |
| RRBGX | R Class |
| TBCIX | I Class |
| TRZBX | Z Class |
| T. ROWE PRICE BLUE CHIP GROWTH FUND |
|
|
HIGHLIGHTS
| ■ | The Blue Chip Growth Fund generated a negative absolute return in the six-month period ended June 30, 2022. The fund underperformed its benchmark, the S&P 500 Index, and lagged the style-specific Russell 1000 Growth Index. The fund also trailed its peer group, the Lipper Large-Cap Growth Funds Index. |
| ■ | Markets suffered their worst first half in decades as inflation fears drove equities downward with a high degree of correlation, which is an unfavorable environment for us as stock pickers. Many of our high-conviction ideas found themselves down significantly at the midway point of the year as bearish sentiment and indiscriminate selling caused a disconnect between share prices and fundamentals in some cases. |
| ■ | The fund’s top sector allocations are in information technology, consumer discretionary, and communication services—areas that we believe offer the most fertile ground for innovation and growth. |
| ■ | Amid macroeconomic uncertainty, we take comfort knowing that we own high-quality businesses—some that should provide defense if markets continue to skid and others that we believe have significant potential to outperform once inflation concerns are in the rear view. |
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Market Commentary
Dear Shareholder
Major stock and bond indexes produced sharply negative results during the
first half of 2022 as investors contended with persistently high inflation,
tightening financial conditions, and slowing growth.
After reaching an all-time high on January 3, the S&P 500 Index finished the
period down about 20%, the worst first half of a calendar year for the index
since 1970. Double-digit losses were common in equity markets around the
globe, and bond investors also faced a historically tough environment amid a
sharp rise in interest rates.
Value shares outperformed growth stocks as equity investors turned risk averse
and rising rates put downward pressure on growth stock valuations. Emerging
markets stocks held up somewhat better than shares in developed markets due
to the strong performance of some oil-exporting countries. Meanwhile, the
U.S. dollar strengthened during the period, which weighed on returns for U.S.
investors in international securities.
Within the S&P 500, energy was the only bright spot, gaining more than
30% as oil prices jumped in response to Russia’s invasion of Ukraine and
the ensuing commodity supply crunch. Typically defensive shares, such as
utilities, consumer staples, and health care, finished in negative territory but
held up relatively well. The consumer discretionary, communication services,
and information technology sectors were the weakest performers. Shares of
some major retailers fell sharply following earnings misses driven in part by
overstocked inventories.
Inflation remained the leading concern for investors throughout the period.
Despite hopes in 2021 that the problem was transitory, and later expectations
that inflation would peak in the spring, headline consumer prices continued to
grind higher throughout the first half of 2022. The war in Ukraine exacerbated
already existing supply chain problems, and other factors, such as the impact
of the fiscal and monetary stimulus enacted during the pandemic and strong
consumer demand, also pushed prices higher. The May consumer price index
report (the last to be issued during our reporting period) showed prices
increasing 8.6% over the 12-month period, the largest jump since late 1981.
In response, the Federal Reserve, which at the end of 2021 had forecast that
only three 25-basis-point (0.25 percentage point) rate hikes would be necessary
in all of 2022, rapidly shifted in a hawkish direction and executed three rate
increases in the first six months of the year. The policy moves included hikes of 25, 50, and 75 basis points—the largest single increase since 1994—increasing
the central bank’s short-term lending benchmark from near zero to a target
range of 1.50% to 1.75% by the end of June. In addition, the Fed ended the
purchases of Treasuries and agency mortgage-backed securities that it had
begun to support the economy early in the pandemic and started reducing its
balance sheet in June.
Longer-term bond yields also increased considerably as the Fed tightened
monetary policy, with the yield on the benchmark 10-year U.S. Treasury note
reaching 3.49% on June 14, its highest level in more than a decade. (Bond
prices and yields move in opposite directions.) Higher mortgage rates led to
signs of cooling in the housing market.
The economy continued to add jobs during the period, and other indicators
pointed to a slowing but still expanding economy. However, the University of
Michigan consumer sentiment index dropped in June to its lowest level since
records began in 1978 as higher inflation expectations undermined confidence.
Looking ahead, investors are likely to remain focused on whether the Fed can
tame inflation without sending the economy into recession, a backdrop that
could produce continued volatility. We believe this environment makes skilled
active management a critical tool for identifying risks and opportunities, and
our investment teams will continue to use fundamental research to identify
companies that can add value to your portfolio over the long term.
Thank you for your continued confidence in T. Rowe Price.
Sincerely,
Robert Sharps
CEO and President
Management’s Discussion of Fund Performance
INVESTMENT OBJECTIVE
The fund seeks to provide long-term capital growth. Income is a secondary objective.
FUND COMMENTARY
How did the fund perform in the past six months?
The Blue Chip Growth Fund returned -34.32% in the six-month period ended June 30, 2022. The fund underperformed its benchmark, the S&P 500 Index, and lagged the style-specific Russell 1000 Growth Index. The fund also trailed its peer group, the Lipper Large-Cap Growth Funds Index. (Returns for the Advisor, R, I, and Z Class shares varied slightly, reflecting their different fee structures. Past performance cannot guarantee future results.)
What factors influenced the fund’s performance?
Markets suffered their worst
first half in decades as inflation fears drove equities downward with a high degree of correlation, which is an unfavorable
environment for us as stock pickers. Many of our high-conviction ideas found themselves down significantly at the midway point of
the year as bearish sentiment and indiscriminate selling caused a disconnect between share prices and fundamentals in some
cases.
In the communication services sector, several of our ad-dependent media holdings suffered. Shares of Meta Platforms
sold off sharply after management revealed that the impact from Apple’s iOS privacy changes was more severe than expected.
While we have confidence in the company’s mitigation efforts, Meta’s advanced, hyperoptimized advertising solutions mean
that the company faces a deeper reset than others as it designs workarounds to restore the signal loss. Shares of Snap Inc. plunged
after management signaled a significant drop in advertising demand with macro headwinds putting downward pressure on advertiser
budgets. Idiosyncratic headwinds plagued other holdings within the sector. Shares of Sea traded lower in response to disappointing guidance around the gaming business, which has been impacted
by the fading of pandemic tailwinds and India’s prohibition on the company’s most popular title due to Chinese investment.
(Please refer to our portfolio of investments for a complete list of holdings and the amount each represents in the portfolio.)
The consumer discretionary sector was another source of weakness.
Several of our bets in the automobiles space did not work in our favor. Shares of Carvana traded lower amid a challenging backdrop
that included affordability concerns for consumers and negative sentiment around a capital raise and cost-cutting measures. Rivian
Automotive was punished for various items, including a small production target miss in 2021, the departure of the company’s
COO, an inflation-driven price increase, and lowered 2022 delivery guidance due to supply chain issues. Shares remained under
pressure late in the period as some large private shareholders reduced their positions following the lockup expiration in May.
Elsewhere in the sector, Amazon.com, one of the portfolio’s largest holdings, was a significant detractor. Despite continued
strength from the company’s cloud business, shares of Amazon.com traded lower as inflation headwinds to logistics and
over-aggressive investments in capacity to meet pandemic-level demand weighed on near-term profitability.
Information technology names were a particular target of investors concerned
about an accelerated pace of interest rate hikes by the Federal Reserve, which
lessen the value of future cash flows. Shares of Microsoft dropped amid a
broader pullback in technology names due to the Fed’s aggressive playbook on
interest rates. The stock also suffered after the company cut its fourth-quarter
guidance due to the expected impact of a strong U.S. dollar. The company
generates a significant share of its revenue from countries that have seen their
currency depreciate against the dollar. Shares of Apple tumbled after consumer
spending data showed a decline in the sale of its hardware products for the
month of May. Investors also feared a potential slowdown in discretionary and
luxury spending that would take place during a recessionary environment.
How is the fund positioned?
Information technology remains our
largest sector allocation. We were net sellers in the sector during the period, although we did find select pockets of opportunity. We
sold out of our position in Fiserv on reduced risk/reward. The stock continued to suffer from negative sentiment regarding the potential
disruption of the fintech space by new competitors. We also eliminated our position in Zoom Video Communications due to our diminished
conviction in the medium-term growth outlook as lingering effects related to the reopening of the economy have negatively impacted earnings.
Most of our significant purchases within the sector were focused on software names. We added to Bill.Com Holdings following a blowout
earnings report highlighted by a stunning 197% year-over-year revenue growth figure, which was largely attributed to post-deal synergies
in the wake of the company’s acquisition of Divvy in June 2021. We also purchased shares of enterprise software company Atlassian. We
like the company’s strong management team, impressive product portfolio, and large opportunity set. We also appreciate the long growth
runway Atlassian has as it benefits from emerging software development trends, cloud migration, and a low-cost flywheel sales model.
Consumer discretionary represented our largest source of purchasing activity during the first half of the year. As a result, the sector
has grown into the fund’s second-largest weighting. Much of our trading activity within the sector was focused on revamping our exposure
to electric vehicles (EVs). We added heavily to our position in Tesla, taking our position to a material overweight, reflecting an incrementally
more constructive view as the leader in EVs has demonstrated its ability to ramp up production, even amid global supply chain disruptions,
to meet increasing demand. We also purchased shares of Carvana, which continues to grow and take market share despite near-term headwinds,
while at the same time making accretive infrastructure acquisitions that enhance inventory selection, propel faster delivery times, and
lower unit costs. We believe that Carvana will leverage its online retail platform and vertically integrated supply chain to disrupt
and gain share of a highly fragmented used car market as it provides customers with a superior value proposition based on price and convenience.
To fund these purchases, we sold out of our stake in Rivian Automotive. The company’s production expansion proved more challenging than
initially anticipated given supply constraints, inflationary pressure weighed on unit economics, and elevated cash burn added some risk
to the production ramp timeline.
The third-largest sector weight is communication services, where we lean toward leaders in the secular shift to digital advertising,
including Meta Platforms and Alphabet. We took down our exposure to these names in light of app-tracking transparency headwinds, which
caused a signal loss for advertisers. We also sold shares of Netflix following the release of first-quarter earnings early in the period,
which revealed that the streaming service’s global subscribership declined quarter over quarter for the first time in almost a decade.
Management’s guidance of 2 million subscriber losses in the second quarter also contributed to the sell-off. Going forward, we will be
closely monitoring the company’s trajectory of growth.
What is portfolio management’s outlook?
In the near term, we are expecting a bumpy ride until the Federal Reserve gets inflation under control. With interest rates rising, continued earnings gains will be needed to support positive returns, but higher wages and input costs, along with softer demand in some end markets, could pressure margins for many companies in the coming months. If we do find ourselves in a short-lived recession because of aggressive Fed actions, that would not necessarily be a bad outcome over the long term since it would provide a hard reset and a better setup for many of our holdings with higher torque to subsequently outperform on the way up. In the meantime, we take comfort knowing that we own high-quality businesses—some that should provide defense if markets continue to skid and others that we believe have significant potential to outperform once inflation concerns are in the rear view.
The views expressed reflect the opinions of T. Rowe Price as of the date of this report and are subject to change based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
RISKS OF INVESTING IN THE FUND
RISKS OF STOCK INVESTING
The fund’s share price can fall because of weakness in the stock markets, a particular industry, or specific holdings. Stock markets can decline for many reasons, including adverse political or economic developments, changes in investor psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitive environment. In addition, the investment manager’s assessment of companies held in a fund may prove incorrect, resulting in losses or poor performance even in rising markets.
RISKS OF GROWTH INVESTING
Growth stocks can be volatile for several reasons. Since these companies usually invest a high portion of earnings in their businesses, they may lack the dividends of value stocks that can cushion stock prices in a falling market. Also, earnings disappointments often lead to sharply falling prices because investors buy growth stocks in anticipation of superior earnings growth.
BENCHMARK INFORMATION
Note: Portions of the mutual
fund information contained in this report was supplied by Lipper, a Refinitiv Company, subject to the following: Copyright 2022
© Refinitiv. All rights reserved. Any copying, republication or redistribution of Lipper content is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions
taken in reliance thereon.
Note: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE
Group”). © LSE Group 2022. FTSE Russell is a trading name of certain of the LSE Group companies. Russell®
is/are a trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights
in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor
its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data
contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group
company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. The
LSE Group is not responsible for the formatting or configuration of this material or for any inaccuracy in T. Rowe Price’s
presentation thereof.
Note: The S&P 500 Index is a product of S&P Dow Jones Indices LLC, a division of S&P
Global, or its affiliates (“SPDJI”) and has been licensed for use by T. Rowe Price. Standard &
Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services
LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones
Trademark Holdings LLC (“Dow Jones”); T. Rowe Price is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones,
S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in
such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.
GROWTH OF $10,000
This chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with benchmarks, which include a broad-based market index and may also include a peer group average or index. Market indexes do not include expenses, which are deducted from fund returns as well as mutual fund averages and indexes.
AVERAGE ANNUAL COMPOUND TOTAL RETURN
EXPENSE RATIO
FUND EXPENSE EXAMPLE
As a mutual fund shareholder, you may incur two types of costs: (1) transaction costs, such as
redemption fees or sales loads, and (2) ongoing costs, including management fees, distribution
and service (12b-1) fees, and other fund expenses. The following example is intended to help
you understand your ongoing costs (in dollars) of investing in the fund and to compare these
costs with the ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the most recent six-month period and held
for the entire period.
Please note that the fund has five share classes: The original share class (Investor Class)
charges no distribution and service (12b-1) fee, Advisor Class shares are offered only through
unaffiliated brokers and other financial intermediaries and charge a 0.25% 12b-1 fee, R Class
shares are available to retirement plans serviced by intermediaries and charge a 0.50% 12b-1
fee, I Class shares are available to institutionally oriented clients and impose no 12b-1 or
administrative fee payment, and Z Class shares are offered only to funds advised by
T. Rowe Price and other advisory clients of T. Rowe Price or its affiliates that are subject to a
contractual fee for investment management services and impose no 12b-1 fee or administrative
fee payment. Each share class is presented separately in the table.
Actual Expenses
The first line of the following table (Actual) provides information about actual account values
and expenses based on the fund’s actual returns. You may use the information on this line,
together with your account balance, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number on the first line under the heading
“Expenses Paid During Period” to estimate the expenses you paid on your account during
this period.
Hypothetical Example for Comparison Purposes
The information on the second line of the table (Hypothetical) is based on hypothetical account
values and expenses derived from the fund’s actual expense ratio and an assumed 5% per
year rate of return before expenses (not the fund’s actual return). You may compare the
ongoing costs of investing in the fund with other funds by contrasting this 5% hypothetical
example and the 5% hypothetical examples that appear in the shareholder reports of the other
funds. The hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period.
Note: T. Rowe Price charges an annual account service fee of $20, generally for accounts with less than $10,000. The fee is waived for any investor whose T. Rowe Price mutual fund accounts total $50,000 or more; accounts electing to receive electronic delivery of account statements, transaction confirmations, prospectuses, and shareholder reports; or accounts of an investor who is a T. Rowe Price Personal Services or Enhanced Personal Services client (enrollment in these programs generally requires T. Rowe Price assets of at least $250,000). This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs, such as redemption fees or sales loads. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. To the extent a fund charges transaction costs, however, the total cost of owning that fund is higher.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
June 30, 2022 (Unaudited)
The accompanying notes are an integral part of these financial statements.
June 30, 2022 (Unaudited)
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
The accompanying notes are an integral part of these financial statements.
Unaudited
| NOTES TO FINANCIAL STATEMENTS |
T. Rowe Price Blue Chip Growth Fund, Inc. (the fund) is registered under the Investment Company Act of 1940 (the 1940 Act) as a nondiversified, open-end management investment company. The fund seeks to provide long-term capital growth. Income is a secondary objective. The fund has five classes of shares: the Blue Chip Growth Fund (Investor Class), the Blue Chip Growth Fund–Advisor Class (Advisor Class), the Blue Chip Growth Fund–R Class (R Class), the Blue Chip Growth Fund–I Class (I Class), and the Blue Chip Growth Fund–Z Class (Z Class). Advisor Class shares are sold only through various brokers and other financial intermediaries, and R Class shares are available through financial intermediaries for employer-sponsored defined contribution retirement plans and certain other retirement accounts. I Class shares require a $500,000 initial investment minimum, although the minimum generally is waived or reduced for financial intermediaries, eligible retirement plans, and certain other accounts. Prior to November 15, 2021, the initial investment minimum was $1 million and was generally waived for financial intermediaries, eligible retirement plans, and other certain accounts. As a result of the reduction in the I Class minimum, certain assets transferred from the Investor Class to the I Class. This transfer of shares from Investor Class to I Class is reflected in the Statement of Changes in Net Assets within the Capital shares transactions as Shares redeemed and Shares sold, respectively. The Z Class is only available to funds advised by T. Rowe Price Associates, Inc. and its affiliates and other clients that are subject to a contractual fee for investment management services. The Advisor Class and R Class each operate under separate Board-approved Rule 12b-1 plans, pursuant to which each class compensates financial intermediaries for distribution, shareholder servicing, and/or certain administrative services; the Investor, I and Z Classes do not pay Rule 12b-1 fees. Each class has exclusive voting rights on matters related solely to that class; separate voting rights on matters that relate to all classes; and, in all other respects, the same rights and obligations as the other classes.
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation The fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately realized upon sale or maturity.
Investment Transactions, Investment Income, and Distributions Investment transactions are accounted for on the trade date basis. Income and expenses are recorded on the accrual basis. Realized gains and losses are reported on the identified cost basis. Premiums and discounts on debt securities are amortized for financial reporting purposes. Income tax-related interest and penalties, if incurred, are recorded as income tax expense. Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are reflected as realized gain/ loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the asset received. Distributions to shareholders are recorded on the ex-dividend date. Income distributions, if any, are declared and paid by each class annually. A capital gain distribution may also be declared and paid by the fund annually.
Currency Translation Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the bid and asked prices of such currencies against U.S. dollars as provided by an outside pricing service. Purchases and sales of securities, income, and expenses are translated into U.S. dollars at the prevailing exchange rate on the respective date of such transaction. The effect of changes in foreign currency exchange rates on realized and unrealized security gains and losses is not bifurcated from the portion attributable to changes in market prices.
Class Accounting Shareholder servicing, prospectus, and shareholder report expenses incurred by each class are charged directly to the class to which they relate. Expenses common to all classes, investment income, and realized and unrealized gains and losses are allocated to the classes based upon the relative daily net assets of each class. The Advisor Class and R Class each pay Rule 12b-1 fees, in an amount not exceeding 0.25% and 0.50%, respectively, of the class’s average daily net assets.
Capital Transactions Each investor’s interest in the net assets of the fund is represented by fund shares. The fund’s net asset value (NAV) per share is computed at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day the NYSE is open for business. However, the NAV per share may be calculated at a time other than the normal close of the NYSE if trading on the NYSE is restricted, if the NYSE closes earlier, or as may be permitted by the SEC. Purchases and redemptions of fund shares are transacted at the next-computed NAV per share, after receipt of the transaction order by T. Rowe Price Associates, Inc., or its agents.
New Accounting Guidance In March 2020, the FASB issued Accounting Standards Update (ASU), ASU 2020–04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021. In March 2021, the administrator for LIBOR announced the extension of the publication of a majority of the USD LIBOR settings to June 30, 2023. Management expects that the adoption of the guidance will not have a material impact on the fund’s financial statements.
Indemnification In the normal course of business, the fund may provide indemnification in connection with its officers and directors, service providers, and/or private company investments. The fund’s maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote.
NOTE 2 - VALUATION
Fair Value
The fund’s financial instruments are valued at the close of the NYSE and are
reported at fair value, which GAAP defines as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The T. Rowe Price Valuation Committee (the Valuation
Committee) is an internal committee that has been delegated certain responsibilities
by the fund’s Board of Directors (the Board) to ensure that financial instruments
are appropriately priced at fair value in accordance with GAAP and the 1940 Act.
Subject to oversight by the Board, the Valuation Committee develops and oversees
pricing-related policies and procedures and approves all fair value determinations.
Specifically, the Valuation Committee establishes policies and procedures used in
valuing financial instruments, including those which cannot be valued in accordance
with normal procedures or using pricing vendors; determines pricing techniques,
sources, and persons eligible to effect fair value pricing actions; evaluates the services
and performance of the pricing vendors; oversees the pricing process to ensure policies
and procedures are being followed; and provides guidance on internal controls and
valuation-related matters. The Valuation Committee provides periodic reporting to the
Board on valuation matters.
Various valuation techniques and inputs are used to determine the fair value of financial
instruments. GAAP establishes the following fair value hierarchy that categorizes the
inputs used to measure fair value:
Level 1 – quoted prices (unadjusted) in active markets for identical financial instruments that the fund can access at the reporting date
Level 2 – inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads)
Level 3 – unobservable inputs (including the fund’s own assumptions in determining fair value)
Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available about the assumptions that market participants would use to price the financial instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining those values.
Valuation Techniques Equity securities, including exchange-traded funds, listed or regularly traded on a securities exchange or in the over-the-counter (OTC) market are valued at the last quoted sale price or, for certain markets, the official closing price at the time the valuations are made. OTC Bulletin Board securities are valued at the mean of the closing bid and asked prices. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at the mean of the closing bid and asked prices for domestic securities and the last quoted sale or closing price for international securities.
The last quoted prices of non-U.S. equity securities may be adjusted to reflect the
fair value of such securities at the close of the NYSE, if the fund determines that
developments between the close of a foreign market and the close of the NYSE will
affect the value of some or all of its portfolio securities. Each business day, the fund uses
information from outside pricing services to evaluate and, if appropriate, decide whether
it is necessary to adjust quoted prices to reflect fair value by reviewing a variety of
factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent
foreign securities and baskets of foreign securities. The fund uses outside pricing services
to provide it with quoted prices and information to evaluate or adjust those prices. The
fund cannot predict how often it will use quoted prices and how often it will determine
it necessary to adjust those prices to reflect fair value.
Debt securities generally are traded in the over-the-counter (OTC) market and are
valued at prices furnished by independent pricing services or by broker dealers who
make markets in such securities. When valuing securities, the independent pricing
services consider the yield or price of bonds of comparable quality, coupon, maturity,
and type, as well as prices quoted by dealers who make markets in such securities.
Investments in mutual funds are valued at the mutual fund’s closing NAV per share on
the day of valuation. Assets and liabilities other than financial instruments, including
short-term receivables and payables, are carried at cost, or estimated realizable value, if
less, which approximates fair value.
Investments for which market quotations or market-based valuations are not readily
available or deemed unreliable are valued at fair value as determined in good faith by
the Valuation Committee, in accordance with fair valuation policies and procedures.
The objective of any fair value pricing determination is to arrive at a price that could
reasonably be expected from a current sale. Financial instruments fair valued by the
Valuation Committee are primarily private placements, restricted securities, warrants,
rights, and other securities that are not publicly traded. Factors used in determining
fair value vary by type of investment and may include market or investment specific
considerations. The Valuation Committee typically will afford greatest weight to actual
prices in arm’s length transactions, to the extent they represent orderly transactions
between market participants, transaction information can be reliably obtained, and
prices are deemed representative of fair value. However, the Valuation Committee
may also consider other valuation methods such as market-based valuation multiples;
a discount or premium from market value of a similar, freely traded security of the
same issuer; discounted cash flows; yield to maturity; or some combination. Fair value
determinations are reviewed on a regular basis and updated as information becomes
available, including actual purchase and sale transactions of the investment. Because any
fair value determination involves a significant amount of judgment, there is a degree of
subjectivity inherent in such pricing decisions, and fair value prices determined by the
Valuation Committee could differ from those of other market participants.
Valuation Inputs The following table summarizes the fund’s financial instruments, based on the inputs used to determine their fair values on June 30, 2022 (for further detail by category, please refer to the accompanying Portfolio of Investments):
NOTE 3 - OTHER INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following practices
to manage exposure to certain risks and/or to enhance performance. The investment
objective, policies, program, and risk factors of the fund are described more fully in the
fund’s prospectus and Statement of Additional Information.
Restricted Securities The fund invests in securities that are subject to legal or
contractual restrictions on resale. Prompt sale of such securities at an acceptable price
may be difficult and may involve substantial delays and additional costs.
Securities Lending The fund may lend its securities to approved borrowers to earn
additional income. Its securities lending activities are administered by a lending agent
in accordance with a securities lending agreement. Security loans generally do not have
stated maturity dates, and the fund may recall a security at any time. The fund receives
collateral in the form of cash or U.S. government securities. Collateral is maintained
over the life of the loan in an amount not less than the value of loaned securities; any
additional collateral required due to changes in security values is delivered to the
fund the next business day. Cash collateral is invested in accordance with investment
guidelines approved by fund management. Additionally, the lending agent indemnifies
the fund against losses resulting from borrower default. Although risk is mitigated by
the collateral and indemnification, the fund could experience a delay in recovering
its securities and a possible loss of income or value if the borrower fails to return the securities, collateral investments decline in value, and the lending agent fails to perform.
Securities lending revenue consists of earnings on invested collateral and borrowing
fees, net of any rebates to the borrower, compensation to the lending agent, and other
administrative costs. In accordance with GAAP, investments made with cash collateral
are reflected in the accompanying financial statements, but collateral received in the
form of securities is not. At June 30, 2022, the value of loaned securities was $57,462,000;
the value of cash collateral and related investments was $60,329,000.
Other Purchases and sales of portfolio securities other than short-term securities
aggregated $4,627,600,000 and $10,048,946,000, respectively, for the six months ended
June 30, 2022.
NOTE 4 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal Revenue
Code and distribute to shareholders all of its taxable income and gains. Distributions
determined in accordance with federal income tax regulations may differ in amount
or character from net investment income and realized gains for financial reporting
purposes. Financial reporting records are adjusted for permanent book/tax differences
to reflect tax character but are not adjusted for temporary differences. The amount and
character of tax-basis distributions and composition of net assets are finalized at fiscal
year-end; accordingly, tax-basis balances have not been determined as of the date of
this report.
At June 30, 2022, the cost of investments for federal income tax purposes was
$39,850,438,000. Net unrealized gain aggregated $22,945,775,000 at period-end, of
which $30,534,633,000 related to appreciated investments and $7,588,858,000 related to
depreciated investments.
NOTE 5 - FOREIGN TAXES
The fund is subject to foreign income taxes imposed by certain countries in which it invests. Additionally, capital gains realized upon disposition of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries. All taxes are computed in accordance with the applicable foreign tax law, and, to the extent permitted, capital losses are used to offset capital gains. Taxes attributable to income are accrued by the fund as a reduction of income. Current and deferred tax expense attributable to capital gains is reflected as a component of realized or change in unrealized gain/loss on securities in the accompanying financial statements. To the extent that the fund has country specific capital loss carryforwards, such carryforwards are applied against net unrealized gains when determining the deferred tax liability. Any deferred tax liability incurred by the fund is included in either Other liabilities or Deferred tax liability on the accompanying Statement of Assets and Liabilities.
NOTE 6 - RELATED PARTY TRANSACTIONS
The fund is managed by T. Rowe Price Associates, Inc. (Price Associates), a wholly
owned subsidiary of T. Rowe Price Group, Inc. (Price Group). The investment
management agreement between the fund and Price Associates provides for an annual
investment management fee, which is computed daily and paid monthly. The fee
consists of an individual fund fee and a group fee. The individual fund fee is equal to
0.30% of the fund’s average daily net assets up to $15 billion and 0.2550% of the fund’s
average daily net assets in excess of $15 billion. The group fee rate is calculated based
on the combined net assets of certain mutual funds sponsored by Price Associates (the
group) applied to a graduated fee schedule, with rates ranging from 0.48% for the first
$1 billion of assets to 0.260% for assets in excess of $845 billion. The fund’s group fee
is determined by applying the group fee rate to the fund’s average daily net assets. At
June 30, 2022, the effective annual group fee rate was 0.29%.
The I Class is subject to an operating expense limitation (I Class Limit) pursuant
to which Price Associates is contractually required to pay all operating expenses of
the I Class, excluding management fees; interest; expenses related to borrowings,
taxes, and brokerage; and other non-recurring expenses permitted by the investment
management agreement, to the extent such operating expenses, on an annualized basis,
exceed the I Class Limit. This agreement will continue through the expense limitation
date indicated in the table below, and may be renewed, revised, or revoked only with
approval of the fund’s Board. The I Class is required to repay Price Associates for
expenses previously paid to the extent the class’s net assets grow or expenses decline
sufficiently to allow repayment without causing the class’s operating expenses (after
the repayment is taken into account) to exceed the lesser of: (1) the I Class Limit in
place at the time such amounts were paid; or (2) the current I Class Limit. However, no
repayment will be made more than three years after the date of a payment or waiver.
The Z Class is also subject to a contractual expense limitation agreement whereby
Price Associates has agreed to waive and/or bear all of the Z Class’ expenses (excluding
interest; expenses related to borrowings, taxes, and brokerage; and nonrecurring
expenses) in their entirety. This fee waiver and/or expense reimbursement arrangement is expected to remain in place indefinitely, and the agreement may only be amended or
terminated with approval by the fund’s Board. Expenses of the fund waived/paid by the
manager are not subject to later repayment by the fund.
Pursuant to these agreements, expenses were waived/paid by and/or repaid to Price
Associates during the six months ended June 30, 2022 as indicated in the table below.
At June 30, 2022, there were no amounts subject to repayment by the fund. Any
repayment of expenses previously waived/paid by Price Associates during the period
would be included in the net investment income and expense ratios presented on the
accompanying Financial Highlights.
In addition, the fund has entered into service agreements with Price Associates and two
wholly owned subsidiaries of Price Associates, each an affiliate of the fund (collectively,
Price). Price Associates provides certain accounting and administrative services to the
fund. T. Rowe Price Services, Inc. provides shareholder and administrative services in its
capacity as the fund’s transfer and dividend-disbursing agent. T. Rowe Price Retirement
Plan Services, Inc. provides subaccounting and recordkeeping services for certain
retirement accounts invested in the Investor Class, R Class and Advisor Class. For the
six months ended June 30, 2022, expenses incurred pursuant to these service agreements
were $53,000 for Price Associates; $5,607,000 for T. Rowe Price Services, Inc.; and
$2,195,000 for T. Rowe Price Retirement Plan Services, Inc. All amounts due to and due
from Price, exclusive of investment management fees payable, are presented net on the
accompanying Statement of Assets and Liabilities.
Additionally, the fund is one of several mutual funds in which certain college savings
plans managed by Price Associates may invest. As approved by the fund’s Board of
Directors, shareholder servicing costs associated with each college savings plan are borne
by the fund in proportion to the average daily value of its shares owned by the college
savings plan. Price has agreed to waive/reimburse shareholder servicing costs in excess
of 0.05% of the fund’s average daily value of its shares owned by the college savings plan.
Any amounts waived/paid by Price under this voluntary agreement are not subject to
repayment by the fund. Price may amend or terminate this voluntary arrangement at
any time without prior notice. For the six months ended June 30, 2022, the fund was
charged $765,000 for shareholder servicing costs related to the college savings plans, of which $456,000 was for services provided by Price. All amounts due to and due from
Price, exclusive of investment management fees payable, are presented net on the
accompanying Statement of Assets and Liabilities. At June 30, 2022, approximately 2%
and 3% of the outstanding shares of the Investor Class and I Class, respectively, were
held by the college savings plans.
Mutual funds, trusts, and other accounts managed by Price Associates or its affiliates
(collectively, Price Funds and accounts) may invest in the fund. No Price fund or
account may invest for the purpose of exercising management or control over the fund.
At June 30, 2022, approximately 100% of the Z Class’s outstanding shares were held by
Price Funds and accounts.
The fund may invest its cash reserves in certain open-end management investment
companies managed by Price Associates and considered affiliates of the fund: the
T. Rowe Price Government Reserve Fund or the T. Rowe Price Treasury Reserve Fund,
organized as money market funds, or the T. Rowe Price Short-Term Fund, a short-term
bond fund (collectively, the Price Reserve Funds). The Price Reserve Funds are offered
as short-term investment options to mutual funds, trusts, and other accounts managed
by Price Associates or its affiliates and are not available for direct purchase by members
of the public. Cash collateral from securities lending, if any, is invested in the T. Rowe
Price Government Reserve Fund; prior to December 13, 2021, the cash collateral from
securities lending was invested in the T. Rowe Price Short-Term Fund. The Price
Reserve Funds pay no investment management fees.
As of June 30, 2022, T. Rowe Price Group, Inc., or its wholly owned subsidiaries,
owned 251,510 shares of the Investor Class, representing less than 1% of the
Investor Class’s net assets, and 85,426 shares of the I Class, representing less than 1% of
the I Class’s net assets.
The fund may participate in securities purchase and sale transactions with other funds
or accounts advised by Price Associates (cross trades), in accordance with procedures
adopted by the fund’s Board and Securities and Exchange Commission rules, which
require, among other things, that such purchase and sale cross trades be effected at the
independent current market price of the security. During the six months ended June 30,
2022, the fund had no purchases or sales cross trades with other funds or accounts
advised by Price Associates.
Price Associates has voluntarily agreed to reimburse the fund from its own resources
on a monthly basis for the cost of investment research embedded in the cost of the
fund’s securities trades. This agreement may be rescinded at any time. For the six
months ended June 30, 2022, this reimbursement amounted to $206,000, which is
included in Net realized gain (loss) on Securities in the Statement of Operations.
NOTE 7 - OTHER MATTERS
Unpredictable events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases, and similar public health threats may significantly affect the economy and the markets and issuers in which a fund invests. Certain events may cause instability across global markets, including reduced liquidity and disruptions in trading markets, while some events may affect certain geographic regions, countries, sectors, and industries more significantly than others, and exacerbate other pre-existing political, social, and economic risks. Since 2020, a novel strain of coronavirus (COVID-19) has resulted in disruptions to global business activity and caused significant volatility and declines in global financial markets. In February 2022, Russian forces entered Ukraine and commenced an armed conflict leading to economic sanctions being imposed on Russia and certain of its citizens, creating impacts on Russian-related stocks and debt and greater volatility in global markets. These are recent examples of global events which may have an impact on the fund’s performance, which could be negatively impacted if the value of a portfolio holding were harmed by these and such other events. Management is actively monitoring the risks and financial impacts arising from these events.
INFORMATION ON PROXY VOTING POLICIES, PROCEDURES, AND RECORDS
A description of the policies and procedures used by T. Rowe Price funds to determine how to vote proxies relating to portfolio securities is available in each fund’s Statement of Additional Information. You may request this document by calling 1-800-225-5132 or by accessing the SEC’s website, sec.gov.
The description of our proxy voting policies and procedures is also available on our corporate website. To access it, please visit the following Web page:
https://www.troweprice.com/corporate/us/en/utility/policies.html
Scroll down to the section near the bottom of the page that says, “Proxy Voting Guidelines.” Click on the links in the shaded box.
Each fund’s most recent annual proxy voting record is available on our website and through the SEC’s website. To access it through T. Rowe Price, visit the website location shown above, and scroll down to the section near the bottom of the page that says, “Proxy Voting Records.” Click on the Proxy Voting Records link in the shaded box.
HOW TO OBTAIN QUARTERLY PORTFOLIO HOLDINGS
The fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s reports on Form N-PORT are available electronically on the SEC’s website (sec.gov). In addition, most T. Rowe Price funds disclose their first and third fiscal quarter-end holdings on troweprice.com.
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
Each year, the fund’s Board of Directors (Board) considers the continuation of the
investment management agreement (Advisory Contract) between the fund and its
investment adviser, T. Rowe Price Associates, Inc. (Adviser). In that regard, at a meeting
held on March 7–8, 2022 (Meeting), the Board, including all of the fund’s independent
directors, approved the continuation of the fund’s Advisory Contract. At the Meeting, the
Board considered the factors and reached the conclusions described below relating to
the selection of the Adviser and the approval of the Advisory Contract. The independent
directors were assisted in their evaluation of the Advisory Contract by independent
legal counsel from whom they received separate legal advice and with whom they
met separately.
In providing information to the Board, the Adviser was guided by a detailed set of
requests for information submitted by independent legal counsel on behalf of the
independent directors. In considering and approving the Advisory Contract, the Board
considered the information it believed was relevant, including, but not limited to, the
information discussed below. The Board considered not only the specific information
presented in connection with the Meeting but also the knowledge gained over time
through interaction with the Adviser about various topics. The Board meets regularly
and, at each of its meetings, covers an extensive agenda of topics and materials and
considers factors that are relevant to its annual consideration of the renewal of the
T. Rowe Price funds’ advisory contracts, including performance and the services and
support provided to the funds and their shareholders.
Services Provided by the Adviser
The Board considered the nature, quality, and extent of the services provided to the fund
by the Adviser. These services included, but were not limited to, directing the fund’s
investments in accordance with its investment program and the overall management of
the fund’s portfolio, as well as a variety of related activities such as financial, investment
operations, and administrative services; compliance; maintaining the fund’s records
and registrations; and shareholder communications. The Board also reviewed the
background and experience of the Adviser’s senior management team and investment
personnel involved in the management of the fund, as well as the Adviser’s compliance
record. The Board concluded that it was satisfied with the nature, quality, and extent of
the services provided by the Adviser.
Investment Performance of the Fund
The Board took into account discussions with the Adviser and reports that it receives
throughout the year relating to fund performance. In connection with the Meeting, the
Board reviewed the fund’s total returns for various periods through December 31, 2021,
and compared these returns with the performance of a peer group of funds with similar
investment programs and a wide variety of other previously agreed-upon comparable
performance measures and market data, including relative performance information as
of September 30, 2021, supplied by Broadridge, which is an independent provider of
mutual fund data.
On the basis of this evaluation and the Board’s ongoing review of investment results, and
factoring in the relative market conditions during certain of the performance periods, the
Board concluded that the fund’s performance was satisfactory.
Costs, Benefits, Profits, and Economies of Scale
The Board reviewed detailed information regarding the revenues received by the Adviser
under the Advisory Contract and other direct and indirect benefits that the Adviser
(and its affiliates) may have realized from its relationship with the fund. In considering
soft-dollar arrangements pursuant to which research may be received from broker-dealers
that execute the fund’s portfolio transactions, the Board noted that the Adviser
bears the cost of research services for all client accounts that it advises, including the
T. Rowe Price funds. The Board received information on the estimated costs incurred
and profits realized by the Adviser from managing the T. Rowe Price funds. The Board
also reviewed estimates of the profits realized from managing the fund in particular, and
the Board concluded that the Adviser’s profits were reasonable in light of the services
provided to the fund.
The Board also considered whether the fund benefits under the fee levels set forth
in the Advisory Contract or otherwise from any economies of scale realized by the
Adviser. Under the Advisory Contract, the fund pays a fee to the Adviser for investment
management services composed of two components—a group fee rate based on the
combined average net assets of most of the T. Rowe Price funds (including the fund)
that declines at certain asset levels and an individual fund fee rate that declines at certain
asset levels based on the fund’s average daily net assets—and the fund pays its own
expenses of operations. The Board concluded that the advisory fee structure for the fund
continued to provide for a reasonable sharing of benefits from any economies of scale
with the fund’s investors.
Fees and Expenses
The Board was provided with information regarding industry trends in management
fees and expenses. Among other things, the Board reviewed data for peer groups that
were compiled by Broadridge, which compared: (i) contractual management fees, actual
management fees, nonmanagement expenses, and total expenses of the Investor Class
of the fund with a group of competitor funds selected by Broadridge (Investor Class
Expense Group); (ii) actual management fees and total expenses of the Advisor Class
of the fund with a group of competitor funds selected by Broadridge (Advisor Class
Expense Group); and (iii) actual management fees, nonmanagement expenses, and
total expenses of the Investor Class of the fund with a broader set of funds within the
Lipper investment classification (Expense Universe). The Board considered the fund’s
contractual management fee rate, actual management fee rate (which reflects the
management fees actually received from the fund by the Adviser after any applicable
waivers, reductions, or reimbursements), operating expenses, and total expenses
(which reflect the net total expense ratio of the fund after any waivers, reductions,
or reimbursements) in comparison with the information for the Broadridge peer groups.
Broadridge generally constructed the peer groups by seeking the most comparable funds based on similar investment classifications and objectives, expense structure, asset
size, and operating components and attributes and ranked funds into quintiles, with the
first quintile representing the funds with the lowest relative expenses and the fifth quintile
representing the funds with the highest relative expenses. The information provided to
the Board indicated that the fund’s contractual management fee ranked in the second
quintile (Investor Class Expense Group), the fund’s actual management fee rate ranked
in the first quintile (Investor Class Expense Group and Expense Universe) and second
quintile (Advisor Class Expense Group), and the fund’s total expenses ranked in the
second quintile (Investor Class Expense Group) and first quintile (Advisor Class Expense
Group and Expense Universe).
The Board also reviewed the fee schedules for other investment portfolios with similar
mandates that are advised or subadvised by the Adviser and its affiliates, including
separately managed accounts for institutional and individual investors; subadvised
funds; and other sponsored investment portfolios, including collective investment trusts
and pooled vehicles organized and offered to investors outside the United States.
Management provided the Board with information about the Adviser’s responsibilities
and services provided to subadvisory and other institutional account clients, including
information about how the requirements and economics of the institutional business are
fundamentally different from those of the proprietary mutual fund business. The Board
considered information showing that the Adviser’s mutual fund business is generally
more complex from a business and compliance perspective than its institutional
account business and considered various relevant factors, such as the broader scope
of operations and oversight, more extensive shareholder communication infrastructure,
greater asset flows, heightened business risks, and differences in applicable laws and
regulations associated with the Adviser’s proprietary mutual fund business. In assessing
the reasonableness of the fund’s management fee rate, the Board considered the
differences in the nature of the services required for the Adviser to manage its mutual
fund business versus managing a discrete pool of assets as a subadviser to another
institution’s mutual fund or for an institutional account and that the Adviser generally
performs significant additional services and assumes greater risk in managing the fund
and other T. Rowe Price funds than it does for institutional account clients, including
subadvised funds.
On the basis of the information provided and the factors considered, the Board
concluded that the fees paid by the fund under the Advisory Contract are reasonable.
Approval of the Advisory Contract
As noted, the Board approved the continuation of the Advisory Contract. No single
factor was considered in isolation or to be determinative to the decision. Rather, the
Board concluded, in light of a weighting and balancing of all factors considered, that
it was in the best interests of the fund and its shareholders for the Board to approve
the continuation of the Advisory Contract (including the fees to be charged for
services thereunder).
Item 1. (b) Notice pursuant to Rule 30e-3.
Not applicable.
Item 2. Code of Ethics.
A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant’s annual Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant’s most recent fiscal half-year.
Item 3. Audit Committee Financial Expert.
Disclosure required in registrant’s annual Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Disclosure required in registrant’s annual Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant’s annual Form N-CSR.
(3) Written solicitation to repurchase securities issued by closed-end companies: not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
T. Rowe Price Blue Chip Growth Fund, Inc.
| By | /s/ David Oestreicher | |||||
| David Oestreicher | ||||||
| Principal Executive Officer | ||||||
| Date | August 17, 2022 | |||||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By | /s/ David Oestreicher | |||||
| David Oestreicher | ||||||
| Principal Executive Officer | ||||||
| Date | August 17, 2022 | |||||
| By | /s/ Alan S. Dupski | |||||
| Alan S. Dupski | ||||||
| Principal Financial Officer | ||||||
| Date | August 17, 2022 | |||||