T. Rowe Price Mid-Cap Growth is closed to new investors. But a fund merger means there's a way in. By Katy Marquardt, Staff Writer January 31, 2006 T. Rowe Price Mid-Cap Growth has a terrific long-term record. Brian Berghuis, manager since the fund's 1992 inception, uses a cautious approach to investing in growth stocks. He seeks out medium-size companies with strong growth potential whose shares are selling at reasonable prices. The fund's annualized return of 14% over the past decade is four percentage points per year better than the average return of funds that invest in fast-growing, midsize companies.The problem is, Mid-Cap Growth (symbol RPMGX; 800-662-2465) hasn't been accepting new accounts since December 2003. But now investors can use a side door to gain entry. Construction equipment maker Caterpillar announced earlier this month that it's unloading its mutual-fund operation, the Preferred Group of Mutual Funds. Baltimore's T. Rowe Price is buying, and plans to merge Preferred's ten funds with their own. This includes Preferred Mid Cap Growth (symbol PFMGX; 800-662-2465), which will merge into T. Rowe Price Mid-Cap Growth. You can hop into the Preferred fund until May 31 and ride it into Price Mid-Cap Growth when the merger is consummated around June 19. Neither fund levies a sales charge. Turner Investment Partners' Christopher McHugh currently skippers Preferred Mid Cap, which has assets of $119 million. (Preferred Group uses sub advisers on all its funds.) Over the past three years to February 1, both the Price fund and the Preferred fund returned an annualized 26%, three percentage points per year ahead of the average of their peers. T. Rowe Price Mid Cap, with $15 billion in assets, is best suited for the part of a conservative investor's portfolio that is devoted to shares of medium-size companies (in this case, those with market values of $1 billion to $10 billion). Its annual expense ratio is a well-below average 0.83%.