T. Rowe Price on Wednesday announced that it had promoted Hugh McGuirk to head the Baltimore-based mutual fund complexs $10 billion municipal bond department.
McGuirk succeeds Mary Miller, who was named director of the firms fixed-income division in late April 2004 and who had continued to oversee the municipal group on an interim basis.
The department oversees management of municipal bonds in 20 mutual funds and 25 separate client accounts.
McGuirk joined T. Rowe Price 11 years ago as a trader, and has since been taking on increasing levels of responsibility for portfolio management, according to the firm.
He currently manages about $2 billion in municipal assets in three mutual funds, several separate accounts, and the firms Tax Efficient Balanced Fund, which invests at least 50% of its assets in tax-exempt securities and puts the rest in common stocks.
Miller had run the municipal department since 1996. Her appointment to head of fixed income last year followed the retirement of industry veteran William T. Reynolds. Reynolds who had previously run the muni department before taking over as head of fixed income in 1996 had been with the firm since 1981.
Assets under management in the municipal department have grown by roughly a third since 2000 to the $10 billion level, as most of the funds outperformed the average total return produced by their competitors, according to the firm. Eleven out of the 14 municipal bond funds rated by the Chicago-based Morningstar Inc. had earned four or the highest five star ratings for their performance as of Dec. 31.
While municipal bond funds suffered from net outflows last year, McGuirk said in a prepared statement this week that he thinks they still hold value for investors.
Long-term municipal bond yields are trading at about 95% of long-term Treasury yields, so these levels would imply that even those in lower tax brackets would benefit from the tax-free municipal income, he said.
T. Rowe Price, which managed $235.2 billion in assets as of Dec. 31, provides mutual funds, sub-advisory services, and separate account management for financial intermediaries, retirement plans, and individual and institutional investors.
