On March 26, 2025, T Rowe Price launched T Rowe Price Capital Appreciation Premium Income ETF (TCAL), the latest addition to its capital appreciation suite of funds and ETFs. The fund is managed by a six-person team with David Giroux in the lead. It posts an expense ratio of 0.34%.
The fund’s unique niche within the Capital Appreciation suite is its focus on “regular” income payouts. It will normally invest in equities with a covered call options strategy overlay. The equities will be selected using Giroux’s traditional discipline, which favors:
- experienced and capable management;
- strong risk-adjusted return potential;
- leading or improving market position or proprietary advantages;
- attractive valuation relative to a company’s peers or its own historical norm; and/or
- low beta and defensive risk-adjusted return potential.
The regular distributions may consist of dividends and cash from the covered call option premiums.
The prime attraction of the fund is David Giroux, a two-time winner of the Morningstar Fund Manager of the Year award, and PRWCX record. The flagship Capital Appreciation Fund has been closed for years with $66 billion in its portfolio, and has beaten its peers for seventeen consecutive years. That is a streak unmatched in the last 100 years. Here is T Rowe Price’s text on the matter:
- The T Rowe Price Capital Appreciation Fund, led by David Giroux, has outperformed its Morningstar category average for 17 consecutive years, setting a record for U.S. equity or multi-asset funds.
- No multi-asset or U.S. equity mutual fund or ETF has had a longer streak under the same portfolio manager. The analysis compared the fund to more than 3,000 funds since 1925, the first full calendar year performance of the first mutual fund.
- Over the 17-year period ending December 31, 2024, the fund ranked in the 1st percentile in its category, with returns nearly double that of its peer group average.
The regular payout piece will generate a tax bill, where you choose to realize the income (that is, they send you a check) or reinvest it. That said, it seems like a fund with very few obvious flaws. If you’re interested in income plus the prospect of some capital gain, you should put it on your due diligence list now.
T Rowe Price Capital Appreciation Premium Income ETF
| Funds | Goals | Asset allocation | Target investors |
| PRWCX Capital Appreciation Fund Closed |
Pursues equity-like returns with significantly less risk. | Stocks: 50%–70% Bonds: 30%–50% |
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| PRCFX Capital Appreciation and Income Fund |
Pursues attractive income while aiming to grow your initial investment over time. | Stocks: 30%–50% Bonds: 50%–70% |
|
| TCAF Capital Appreciation Equity ETF |
Seeks to outperform the S&P 500 Index with a lower risk profile and better tax efficiency than an S&P 500 Index ETF. | Stocks: 100% Bonds: 0% |
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| TCAL Capital Appreciation Premium Income ETF |
Seeks to deliver high income through a combination of call option premiums and equity dividends. | Stocks: 100% Bonds: 0% |
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