Global Technology Equity Fund

Capital at risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

The listed funds are not an exhaustive list of funds available. Visit www.funds.troweprice.com to see the full range of funds offered by T. Rowe Price, including those that consider environmental and social characteristics as part of their investment process. For up to date information regarding any T. Rowe Price fund's investment strategy, please see the relevant fund KID and prospectus.

Overview

Manager's Outlook

Global technology stocks faced pressure during the period as the market saw a continuation of the macro-driven-style headwinds in equity markets that have persisted since late 2021. The Federal Reserve's mid-June decision to raise interest rates by three-quarters of a percentage point, the most aggressive hike since 1994, also exacerbated fears that higher borrowing costs could tip the U.S. into a recession. As interest rates have increased, the market's duration has shortened, which hasn't boded well for long duration growth assets like technology stocks. In recent months, many technology companies, including several mega-cap stocks as well as technology companies that we don't own in the portfolio, missed quarterly earnings estimates and issued disappointing guidance as a result of difficult year-over-year comparables, which has further weighed on valuations within the technology space. At the end of June, the Nasdaq Composite remained in bear territory, while the MSCI All Country World Index Information Technology ended the month down more than 25% from the start of the year.

�

As with many other areas of the market, demand distortions stemming from the coronavirus pandemic and recent supply chain issues have impacted our investment universe and challenged even some of the most seasoned management teams in our portfolio, such as Amazon.com. The scale of its business does not create immunity to these challenges; in fact, it could exaggerate it in the short term. However, many of the top holdings in the portfolio today have secular growth drivers that we think are durable, including digital transformation?in which we are participating through the public cloud providers?next-generation database companies, and infrastructure software companies. We maintain conviction in the fundamental growth profiles that our investments bring to the portfolio, and we are confident that the unique, long-term prospects of these firms will again be rewarded.

�

We believe the market has more than discounted the possibility of greater interest rate hikes in the coming months as reflected in technology valuations that have corrected to pre-pandemic levels. Going forward, we think recessionary pressures will come from earnings revisions, as opposed to from multiple compression. We are starting to see estimate revisions, but so far these revisions have been isolated to semiconductors and the consumer. Our overweight allocation to enterprise software is a defensive position from a fundamental perspective. We have conviction of the underlying business models and profitability these companies have with established unit economics in a variety of economic scenarios.

Strategy

Fund Summary

Our fundamental company research and bottom-up analysis aims for early identification of disruptive technology trends and to identify future winners and losers of technological change. We invest in primarily mid- to large-sized companies with strong and/or increasing market share and product pipelines that appear to be strategically poised for long-term growth. The promotion of environmental and/or social characteristics is achieved through the fund's commitment to maintain at least 10% of the value of its portfolio invested in Sustainable Investments, as defined by the SFDR. Additionally, we apply a proprietary responsible screen (exclusion list). The manager is not constrained by the fund’s benchmark, which is used for performance comparison purposes only.

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

31-Mar-2024 - Dom Rizzo, Portfolio Manager,

Global equities delivered solid gains in March as central banks continued signalling potential interest rate cuts this year and exuberance toward artificial intelligence (AI)-driven demand helped buoy stocks. Within the portfolio, stock selection in semiconductors detracted from relative returns. Shares of a company that specialises in developing memory chips and graphics processors used in consumer electronics declined on concerns over whether it would be able to export its attractive new products to China. Still, we are constructive on the potential for a new product launch with advanced AI capabilities to add meaningful upside for the company. Stock selection in software also weighed on relative results. Shares of a software-based secure web gateway fell as the company did not meet the high standard of performance its recent earnings reports had set. We believe the company boasts a strong management team and can continue to show significant topline growth that looks attractive at current valuations. Alternatively, stock selection and an overweight position in information technology services contributed. Shares of a cryptocurrency wallet and exchange platform rose as bitcoin prices hit an all-time high in March. We believe that increased enthusiasm around bitcoin and cryptocurrency creates an attractive opportunity.

30-Jun-2022 - Alan Tu, Portfolio Manager,

Despite the ongoing macroeconomic challenges, we have remained steadfast in our investment approach, which is based on the twin pillars of our careful fundamental research and our willingness to be patient in times of volatility. We believe that our holdings' fundamentals have remained largely consistent throughout this volatile period, helping to reinforce our conviction and continued focus on longer-term prospects.

Software

Within software, we invest in companies that benefit from strong secular growth drivers, sustaining demand in the face of macro uncertainty, and have limited supply chain exposure. Many of the software companies that we favor develop innovative solutions that are valued by their customers precisely for their ability to create greater efficiencies. We believe these efficiencies should lead to higher productivity and lower costs.

We initiated a position in Salesforce, a leading provider of customer relationship management software. Shares dropped mid-quarter on concerns that protracted economic weakness could undermine enterprise technology spending, and we believe this created an attractive valuation for a company that is in a privileged market position and has a long growth runway driven by businesses prioritizing how they attract and serve customers. We also believe in management's efforts to make the business more profitable.
We downsized our position in Okta, a company providing software services for identity management solutions. Okta was negatively impacted by a security incident earlier in the year. However, we believe an increasingly mobile workforce, along with growing demand from enterprises for more robust network security, represents strong secular tailwinds for the firm.
We reduced our position in Hubspot, a provider of marketing and customer relationship management software for small businesses. Although e-commerce has decelerated and consumer spending has weakened, we believe HubSpot should continue to benefit from its strong management team, the secular shift from offline-to-online interactions, and the prospects for increased durable growth as it moves upmarket.

Semiconductors

We trimmed our position in semiconductors and maintained an underweight position given our concerns over the inventory cycle. However, we are becoming more constructive on certain holdings within the space given the recent increase in data center spending.

We sold shares in Taiwan Semiconductors, the world's largest dedicated foundry of semiconductor manufacturer capacity. We believe the company's sustained tech leadership in the semiconductor space and broadening demand from smartphones to personal computing, data centers, and automotive components can help it overcome cyclical demands within the industry. While we remain constructive on the position, we trimmed our holdings to capture some long-term profits.

Internet

Seeking to balance risk and reward, we trimmed certain names in internet, especially companies that are facing regulatory risks or increased competition.

MercadoLibre is the premier e-commerce marketplace in Latin America. We trimmed our position given signs of slowing online growth. While we continue to appreciate the company's vibrant marketplace ecosystem and proven experience in building two-sided networks, we have increased cautiousness on the company's ability to overdeliver on commerce volume growth expectations as we cycle through two years of elevated pandemic-related comparables in the quarters ahead.
We sold shares in Etsy to reduce our position size and on concerns about macroeconomic headwinds and slowing e-commerce demand. Etsy is an online marketplace for unique, creative, and often homemade goods that employs a flywheel strategy to drive organic revenue growth. We value the company for its strong market position, global growth opportunity, and very large total addressable market.

Media and Entertainment

We added to select holdings in the media and entertainment space.

We added to Roblox on recent weakness. We are attracted to the powerful social network effects Roblox utilizes in drawing in new active users and creators. This sets up a positive feedback loop and helps the platform widen its moat, expand its addressable market, and potentially deliver durable earnings.

Industrials

Supply chain problems continued to hamper electric vehicle makers' ability to meet robust demand. We reduced our exposure to the subsector during the quarter.

We sold shares of Tesla. Performance lagged as the company dealt with mixed messaging on staffing levels and production issues. We appreciate Tesla's ability to leverage its advantages in manufacturing, software, and brand, and we expect it to eventually be able to move down the cost curve and unlock new parts of the market while increasing unit margins. However, we sold shares during the period to manage risk/reward.
We eliminated our position in the electric vehicle manufacturer and developer Rivian Automotive. While the company reduced cash burn and has a projected liquidity runway to 2025 to provide runway for its production ramp-up, we sold shares on the belief that it remains a long road to scale. We feel the company will have to walk an execution tightrope to profitably produce its models, especially its SUV and pickup truck, and continue to add production volume while coming down the cost curve.

31-Jan-2024 - Dom Rizzo, Portfolio Manager,

We believe that enterprise software companies are the best conduit to artificial intelligence (AI) and will drive a powerful narrative in the market. We expect that application companies will benefit from price increases as they integrate AI into their products and charge for the value this new-found productivity provides. Infrastructure and data operations companies will also likely benefit from the additional software that will be written due to how much easier AI will make software development. One of our largest holdings in software is displaying strength in layering AI capabilities into its already-attractive suite of products, which creates new growth opportunities.

30-Jun-2022 - Alan Tu, Portfolio Manager,

We initiated a position in Salesforce, a leading provider of customer relationship management software. Shares dropped mid-quarter on concerns that protracted economic weakness could undermine enterprise technology spending, and we believe this created an attractive valuation for a company that is in a privileged market position and has a long growth runway driven by businesses prioritizing how they attract and serve customers. We also believe in management's efforts to make the business more profitable.
We downsized our position in Okta, a company providing software services for identity management solutions. Okta was negatively impacted by a security incident earlier in the year. However, we believe an increasingly mobile workforce, along with growing demand from enterprises for more robust network security, represents strong secular tailwinds for the firm.
We reduced our position in Hubspot, a provider of marketing and customer relationship management software for small businesses. Although e-commerce has decelerated and consumer spending has weakened, we believe HubSpot should continue to benefit from its strong management team, the secular shift from offline-to-online interactions, and the prospects for increased durable growth as it moves upmarket.
We sold shares in Taiwan Semiconductors, the world's largest dedicated foundry of semiconductor manufacturer capacity. We believe the company's sustained tech leadership in the semiconductor space and broadening demand from smartphones to personal computing, data centers, and automotive components can help it overcome cyclical demands within the industry. While we remain constructive on the position, we trimmed our holdings to capture some long-term profits.
MercadoLibre is the premier e-commerce marketplace in Latin America. We trimmed our position given signs of slowing online growth. While we continue to appreciate the company's vibrant marketplace ecosystem and proven experience in building two-sided networks, we have increased cautiousness on the company's ability to overdeliver on commerce volume growth expectations as we cycle through two years of elevated pandemic-related comparables in the quarters ahead.
We sold shares in Etsy to reduce our position size and on concerns about macroeconomic headwinds and slowing e-commerce demand. Etsy is an online marketplace for unique, creative, and often homemade goods that employs a flywheel strategy to drive organic revenue growth. We value the company for its strong market position, global growth opportunity, and very large total addressable market.
We added to Roblox on recent weakness. We are attracted to the powerful social network effects Roblox utilizes in drawing in new active users and creators. This sets up a positive feedback loop and helps the platform widen its moat, expand its addressable market, and potentially deliver durable earnings.
We sold shares of Tesla. Performance lagged as the company dealt with mixed messaging on staffing levels and production issues. We appreciate Tesla's ability to leverage its advantages in manufacturing, software, and brand, and we expect it to eventually be able to move down the cost curve and unlock new parts of the market while increasing unit margins. However, we sold shares during the period to manage risk/reward.
We eliminated our position in the electric vehicle manufacturer and developer Rivian Automotive. While the company reduced cash burn and has a projected liquidity runway to 2025 to provide runway for its production ramp-up, we sold shares on the belief that it remains a long road to scale. We feel the company will have to walk an execution tightrope to profitably produce its models, especially its SUV and pickup truck, and continue to add production volume while coming down the cost curve.

30-Jun-2022 - Alan Tu, Portfolio Manager,

Shopify offers online merchants a single, easy-to-use platform for setting up and managing e-commerce businesses. The company faced macroeconomic headwinds as its warning of decelerating e-commerce sales growth alarmed investors. We think year-over-year comparisons in e-commerce should improve in the second half of 2022. Additionally, investors have been sanguine on the expansion of its Shopify Fulfillment Network, an investment we think is constructive.
Atlassian, a collaboration and workflow tool provider, detracted from relative returns during the period. The uncertain pace of its users migrating to the cloud, a long-term driver of increased revenue for Atlassian, is providing near-term friction as the company cannot control when the clients choose to change over. We believe Atlassian can successfully navigate this transition, and we remain constructive on the long-term prospects of a company that directly targets users in marketing their products by employing a low-cost flywheel approach rather than a traditional top-down sales model.
Shares of DoorDash, a growing on-demand delivery platform, lost value as markets feared the firm may face a demand hangover as the coronavirus pandemic wanes. We believe DoorDash maintains a favorable behavioral backdrop with purchases becoming habitual in its customer base, which should allow for high retention even in the face of a tough economic setting. We also like the company's strategy that focuses on building last-mile logistics to expand its services across multiple market segments and penetrate a large and growing accessible market.
Shares of Sea declined after the company reported a drop in margins, mainly attributing losses to its increased discretionary spend on research and development. While we are still attracted to Sea's unique platform and ability to lead secular trends within fast-growing markets, we will monitor how the company evolves its growth strategy and game development.
Shares of Tesla, the leading developer of electric and automated vehicles, declined as founder Elon Musk's efforts to buy Twitter raised concerns about how he would fund that purchase, with his Tesla stock used as collateral. We appreciate Tesla's ability to leverage its advantages in manufacturing, software, and brand, and we expect the company will eventually move down the cost curve and unlock new parts of the market while increasing unit margins.
A lack of exposure to IT services detracted from relative performance as many of these stocks outperformed those in other areas of technology, despite their negative returns.
An underweight position in semiconductors contributed to relative results as the sector underperformed the broader index.

Benchmark Data Source: MSCI. MSCI index returns are shown with reinvestment of dividends after the deduction of withholding taxes. MSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

Past performance is not a reliable indicator of future performance.

Source for performance: T. Rowe Price. Fund performance is calculated using the official NAV with dividends reinvested, if any. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. It will be affected by changes in the exchange rate between the base currency of the fund and the subscription currency, if different. Sales charges (up to a maximum of 5% for the A Class), taxes and other locally applied costs have not been deducted and if applicable, they will reduce the performance figures.

The Funds are sub-funds of the T. Rowe Price Funds SICAV, a Luxembourg investment company with variable capital which is registered with Commission de Surveillance du Secteur Financier and which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). Full details of the objectives, investment policies and risks are located in the prospectus which is available with the key investor information documents and/or key information document (KID) in English and in an official language of the jurisdictions in which the Funds are registered for public sale, together with the articles of incorporation and the annual and semi-annual reports (together “Fund Documents”). Any decision to invest should be made on the basis of the Fund Documents which are available free of charge from the local representative, local information/paying agent or from authorised distributors. They can also be found along with a summary of investor rights in English at www.troweprice.com. The Management Company reserves the right to terminate marketing arrangements.

Daily performance data is based on the latest available NAV.

Please note that the Fund typically has a risk of high volatility.

Hedged share classes (denoted by 'h') utilise investment techniques to mitigate currency risk between the underlying investment currency(ies) of the fund and the currency of the hedged share class. The costs of doing so will be borne by the share class and there is no guarantee that such hedging will be effective.

The specific securities identified and described in this website do not represent all of the securities purchased, sold, or recommended for the sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.

Attribution Data: Analysis represents the total performance of the portfolio as calculated by the FactSet attribution model and is inclusive of other assets that that will not receive a classification assignment in the detailed structure shown. Returns will not match official T. Rowe Price performance because FactSet uses different exchange rate sources and does not capture intra-day trading. Performance for each security is obtained in the local currency and, if necessary, is converted to U.S. dollars using an exchange rate determined by an independent third party. Figures are shown with gross dividends reinvested.

Sources: Copyright © 2020 FactSet Research Systems Inc. All rights reserved. Analysis by T. Rowe Price Associates, Inc. T. Rowe Price uses a custom structure for sector and industry reporting for this product.

A full list of the currently issued Share Classes including Distributing, Hedged, and Accumulating Categories may be obtained, free of charge and upon request, from the registered office of the Company.

©2023 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Software

Semiconductors

Internet

Media and Entertainment

Industrials

Risks

Typical Investor