The Baltimore-based investment firm also expects only modest returns on U.S. shares overall in the next three to five years, less than consensus market expectations, Stromberg told Reuters.

Many portfolio managers at the firm are doubtful about a rebound in commodities prices, from energy to natural resources, even though the firm does not have an official "house view," said Stromberg, who is visiting Tokyo.

"We don't think there's much upside left for oil. We think it could even go down over the next two, or three, or four years," he said.

After a crushing fall to around $26 per barrel in early 2016 from its 2011-14 trading range around $100, U.S. crude futures recovered to 1-1/2-year highs above $55 this month, helped by planned output cuts by oil producing countries.

Stromberg said many energy-related stocks seem to reflect the view that oil prices will continue to rise to $60-70, adding that T.Rowe Price sees such a rally as unsustainable.

While improving global economic growth is supporting demand for energy and other metals that are used in production, it is not enough to drive commodity prices substantially higher, Stromberg said.

He said there was excess supply in the energy sector, particularly in the United States, due to shale production.

"So we, as a firm, do have a strong view in one area and that is we're worried about long-term energy prices."

T.Rowe Price is modestly positive on U.S. shares although the upside is expected to be limited.

"Everyone is expecting that earnings growth will pick up again. And it's built into the expectations of stocks already," he said.

"We too think earnings will grow from this level, but not by as much as the market might think," Stromberg said, adding that many price earnings predictions were in the 15-20 percent range.

"But we would say in the high single-digit, 5 to 9 percent range, will be a reasonable number," he said.

On U.S. stocks, the firm is positive about financials as it expects U.S. President-elect Donald Trump's administration to loosen financial regulations.

Stromberg said U.S. presidents should focus on the big picture to create conditions for economic prosperity rather than trying to micro-manage each company's business decisions.

"I would say, in a very general sense, that in the world of President of the United States, most investors would prefer that the president creates the conditions for corporate success and worries less about any individual company's decision to build a plant in the U.S. or in Canada or Mexico," he said.

"And if the president creates the right conditions for business success, then it will happen broadly. If the president focuses on any one company here and there, that's probably a less productive way of solving problems."

Trump has lambasted some automakers for building plants in Mexico to export to the United States, and chastised drugmakers and defense companies for their high costs.

T.Rowe Price is the fifth-largest mutual fund in the United States with $813 billion in assets under management as of Sept. 30.

(Editing by Jacqueline Wong)

By Tomo Uetake