US All-Cap Opportunities 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

Strategy

Fund Summary

The investment approach is guided by a flexible and pragmatic investment framework that seeks to identify companies that we believe offer the highest outperformance probability across a broad investable universe. Unconstrained by investment style or market cap, we are able to nimbly pivot as opportunities arise. 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.

30-Jun-2022 - Taymour Tamaddon, Portfolio Manager,

U.S. stocks recorded steep losses in June as fears that the Federal Reserve’s fight against inflation would push the economy into recession. Most broad indices fell considerably. As measured by various Russell indexes, value stocks fared worse than growth stocks across all market capitalisations. Within the S&P 500 Index, sector performance was broadly negative. The energy sector, which led markets for much of the year, was the biggest laggard. Consumer staples and health care held up best, posting only modest losses. Within the portfolio, consumer staples detracted the most from relative returns due to our avoidance of the sector; we have minimal exposure to stocks here as it generally lacks compelling growth opportunities that meet our investment criteria. Consumer discretionary also hurt relative results due to an overweight allocation and negative stock choices in the sector. An overweight position along with unfavourable stock selection in communication services lowered relative performance further. Conversely, information technology contributed the most to relative results due to positive security selection. An overweight allocation to the health care sector also assisted relative returns, however adverse stock picks capped gains.

31-Aug-2022 - Taymour Tamaddon, Portfolio Manager,

In the near term, the U.S. Federal Reserve’s rate hikes will likely lead to a lower-growth environment, making growth a scarce asset that investors should be willing to pay a premium for, leaving us in a good position. It is also important to keep in mind that the growth prospects of most of our holdings are not necessarily tied to the growth of their end markets, but to market share gains within those end markets, making it possible to grow earnings in a low-growth environment. As always, we maintain a disciplined adherence to our rigorous investment process, which is rooted in bottom-up, fundamental research.

30-Sep-2022 - Taymour Tamaddon, Portfolio Manager,

We sold shares of Alphabet to manage our position size in light of weakening industrywide advertising demand signals. A slate of disappointing earnings reports released by peers during the quarter prompted investor concerns of a broad-based digital advertising recession. However, we remain encouraged by the deep moat that Alphabet has built around its core search franchise. Over the long term, we continue to believe that Alphabet, with dominant positions across everyday use internet utilities, combined with a world-class computing infrastructure and talent, is well positioned to extract value from the economy as the world becomes more digital.
We sold shares of Meta Platforms on heightened near-term risk/reward. An industrywide slowdown in ad demand has taken a toll on the social media giant's topline growth. Meta's advanced, hyper-optimized advertising solutions mean that the company faces a deeper reset than others as it designs workarounds to restore the signal loss resulting from Apple's iOS privacy changes. Meta is one of two leading platforms that we expect to benefit from a multi-decade transition from offline to online advertising, and it offers investors a rare combination of scale, growth, and profitability at an attractive valuation with multiple catalysts that include a collection of under-monetized surfaces and social commerce initiatives.
We initiated a position in Eli Lilly. We are optimistic following the U.S. Food and Drug Administration's approval in May of the new diabetes drug tirzepatide, which will be branded as Mounjaro. Robust sales volumes of cancer and COVID-19 antibody drugs are also encouraging. We believe that the company has several late-stage assets with high probabilities of success that should serve as catalysts over the next 12 to 18 months. We also expect Eli Lilly's base business to remain stable against competition and drug pricing pressures, and we are encouraged by management's goal of increasing the company's operating margin percentage over the next five years.
We established a position in energy drink company Monster Beverage on weakness. The stock price slumped in response to Monster's second-quarter earnings release in early August, as the company reported its gross margin far below consensus expectations due to cost inflation. We like Monster for its durable topline growth and strong position in the fast-growing, high-margin energy drink category and think its setup improves from here as price increases take hold and input costs come down.

30-Sep-2022 - Taymour Tamaddon, Portfolio Manager,

Shares of Cigna climbed higher in the wake of a solid second-quarter earnings release in August. The positive results were driven by a better-than-expected medical loss ratio and continued strength in its Evernorth segment. We believe that Cigna represents an underappreciated source of steady growth at an attractive valuation and that the acquisition of Express Scripts should enhance the company's overall earnings growth profile. Cigna also has significant exposure to commercial markets in which we think that the company will be able to exercise pricing power in the near term.
Shares of Ross Stores rose. Investors were content with its second-quarter earnings results, which were in line with expectations. The off-price retailer also appeared to benefit from heightened expectations of an economic downturn and projections that it may benefit from changing consumer behavior. We believe Ross Stores will remain a long duration earnings growth story through a combination of square footage expansion and solid same-store sales growth. In addition, we view the stock's risk/reward profile as compelling.
Shares of Rivian Automotive rebounded. In July, Amazon.com began rolling out its fleet of Rivian electric delivery vans in select cities. The introduction of the sweeping Inflation Reduction Act in the U.S. Senate, which would include an improvement to the electric vehicle tax credit, also buoyed the stock. In August, investors reacted positively to management commentary that was incrementally more optimistic regarding the potential for Rivian to meet or exceed its production guide. We believe that Rivian is well positioned to benefit from the automotive industry's most powerful trend of electrification as it targets the largest, most profitable segments of this growing market (mid-size luxury and large luxury). Led by a very capable management team, we expect Rivian to benefit from strategic partnerships and business-to-business trends that should provide stability, as well as scale efficiencies for its business-to-consumer segment
Shares of Snap Inc. plunged due to a disappointing second-quarter earnings report, which management attributed to a challenging economy, slowing demand for the company's online ad platform, the lingering impact of Apple's 2021 iOS privacy changes update, and rising competition. In response to these challenges, the company announced plans to slow its pace of hiring, invest in its advertising business, and find new sources of income. Management also announced a share repurchase program. Snap Inc.'s control of the impressionable and highly engaged youth demographic, relatively low ad load, and culture of innovation combine to form a tightly coiled monetization spring. We believe that network effects and innovations in technology will continue to drive user growth and engagement, paving the way for ad inventory expansion that should drive earnings growth over time.
Shares of ServiceNow fell after management took down its full-year subscription revenue outlook due to the impact of a strong U.S. dollar; the company earns a large portion of its revenue from countries that have seen their currencies depreciate against the dollar. We believe that ServiceNow's strong platform should allow it to continue to take share within its core market and expand to adjacencies outside of IT service management.

Indicative Benchmark Data Source: Russell. Frank Russell Company (“Russell”) is the source and owner of the Russell Index data contained or reflected in these materials and all trademarks and copyrights related thereto. Russell® is a registered trademark of Russell. Russell is not responsible for the formatting or configuration of this materials or for any inaccuracy in T. Rowe Price Associates’ presentation thereof.

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.

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.

Daily performance data is based on the latest available NAV.

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 © 2024 FactSet Research Systems Inc. All rights reserved. MSCI/S&P GICS Sectors; Analysis by T. Rowe Price Associates, Inc. T. Rowe Price uses the MSCI/S&P Global Industry Classification Standard (GICS) for sector and industry reporting. Each year, MSCI and S&P make changes to the GICS structure. The last change occurred on September 28, 2018. T. Rowe Price will adhere to all future updates to GICS for prospective reporting.

The Global Industry Classification Standard ("GICS") was developed by and is the exclusive property and a service mark of Morgan Stanley Capital International Inc, ("MSCI") and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") and is licensed for use by [Licensee]. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or impIied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any or such standard or classification, Without limiting any or the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

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.

©2024 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.

Risks

Typical Investor