T. Rowe Price T. Rowe Price Trusty Logo

SICAV

Global Value Equity Fund

Targeting attractively valued global companies with prospects for improving earnings growth.

ISIN LU0859255472 Bloomberg TRPGVEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

-0.23%
$48.1m

1YR Return
(View Total Returns)

Manager Tenure

-0.81%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-1.18
3.25%

Inception Date 28-Nov-2012

Performance figures calculated in USD

Other Literature

31-May-2020 - Sebastien Mallet, Portfolio Manager,
The coronavirus pandemic continues to create tremendous uncertainty in equity markets. We are concentrating on a bottom-up approach, looking for the best relative value ideas where market uncertainty has caused what we believe to be an unwarranted decoupling from fundamental intrinsic value. Given our robust research platform and collective experience, we are confident in our ability to find these unique opportunities before their potential for substantial prosperity becomes obvious to other investors.
Sebastien Mallet
Sebastien Mallet, Portfolio Manager

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Click for Manager Outlook
 

Strategy

Manager's Outlook

The current equity environment is characterised by tremendous uncertainty regarding the likely human and economic impact of the coronavirus pandemic. Even amid the pronounced market sell-off in response to the global spread of the coronavirus and government actions to contain its spread, growth stocks have continued to outperform value stocks. Financial companies face a further extended period of low rates, as well as recessionary conditions triggered by global lockdowns. Meanwhile, the energy sector suffered amid the double whammy of low demand and over-supply of oil, which led to an implosion of oil prices. In addition, liquidity and leverage pressures caused concerns, which disproportionately weigh upon value investments.

The silver lining for value investors: Valuation dispersions are now at almost unprecedented levels across regions and sectors, resulting in a very high level of opportunities. As we enter a recovery period over the next 12 to 18 months this should be a positive backdrop for value investing. Any change in the market's longer-term prognosis for inflation and interest rates should similarly be very supportive.

In the U.S., the government has passed a record-setting USD 2 trillion stimulus package, nearly 10% of its gross domestic product (GDP). Meanwhile, the Federal Reserve acted rapidly to inject a massive amount of liquidity into markets hoping to instill a floor in bond pricing and prevent a liquidity crisis. For now, the extreme measures appear to be alleviating some of the pain as credit markets have shown signs of stabilization. However, it remains to be seen if these measures will be enough to get markets through this crisis. Within the market dislocation, we are finding opportunities in well-run companies, particularly those with more cyclical characteristics.

European nations, particularly Spain and Italy, were hit hard by the spread of the coronavirus during the quarter and lockdowns are now widespread across the Continent. Fiscal stimulus measures are being rolled out and monetary policy remains accommodative. European markets have been among the worst performers this year, and we are able to find well-managed companies with particularly inexpensive valuations.

In Asia, while China was the origin of the outbreak, lockdown measures began to be eased towards the end of the quarter and hope for some normalization helped to improve investor sentiment. We found opportunities to add to Chinese companies earlier in the quarter, although we may look to trim positions here should they begin to appear more fairly valued. In Japan, the government has been relatively slow to announce restrictive lockdown measures. Prime Minister Shinzo Abe announced one of the largest stimulus packages worldwide, including approximately 7% of GDP to support the economy. As for other major economies, a weak global backdrop remains a risk to Japan's outlook, especially given the importance of its export sector. Crucially for investors such as ourselves, corporate governance has been improving in recent years, with companies becoming more shareholder friendly, and we continue to identify stocks with compelling valuations befitting of our value perspective.

We continue to concentrate on the bottom-up view, with a focus on selecting companies with strong free cash flow generation not yet fully appreciated by the market and with the scope to increase shareholder returns. We are finding many pockets of controversy where fundamentally sound, well-run businesses face unwarranted investor skepticism. Given our robust research platform and collective experience, we are confident in our ability to find these unique opportunities before their potential for substantial prosperity becomes obvious to other investors.�

Investment Objective

To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a widely diversified portfolio of undervalued stocks of companies anywhere in the world, including emerging markets.

Investment Approach

  • Diversified portfolio investing in companies located throughout the globe.
  • Emphasize attractively valued companies with prospects for improving earnings growth.
  • Employ rigorous and comprehensive research to identify and assess investment opportunities.
  • Allocate country and sector positions through consideration of:
    • Attractiveness of individual investments
    • Macroeconomic environment

Portfolio Construction

  • Typically 80-100 stock portfolio
  • Individual positions typically range from 0.30% to 3.00% — average position size of 1.00%
  • Country and sector weights generally range +/- 15% deviation from the benchmark
  • Maximum of 10% in emerging markets
  • Reserves range from 0% to 10%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % -0.81% -0.23% 2.02% 7.42% 7.42%
Indicative Benchmark % 6.80% 5.91% 5.84% 8.99% 8.99%
Excess Return % -7.61% -6.14% -3.82% -1.57% -1.57%

Inception Date 28-Nov-2012

Manager Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  31-May-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -15.14% -3.41% 0.30% 5.70%
Indicative Benchmark % -10.39% 1.92% 3.25% 6.98%
Excess Return % -4.75% -5.33% -2.95% -1.28%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  31-Mar-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 02-Jul-2020 Quarter to DateData as of 02-Jul-2020 Year to DateData as of 02-Jul-2020 1 MonthData as of 31-May-2020 3 MonthsData as of 31-May-2020
Fund % 2.89% 2.89% -11.16% 3.01% -3.00%
Indicative Benchmark % 1.19% 1.19% -4.64% 4.83% 0.89%
Excess Return % 1.70% 1.70% -6.52% -1.82% -3.89%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Indicative Benchmark: MSCI World Index Net

Performance figures calculated in USD

Past performance is not a reliable indicator of future performance.  Source for fund 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. 

Where the base currency of the fund differs from the share class currency, exchange rate movements may affect returns.

Index returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 July 2018, the "net" version of the indicative benchmark replaced the "gross" version of the indicative benchmark. The "net" version of the indicative benchmark assumes the reinvestment of dividends after the deduction of withholding taxes applicable to the country where the dividend is paid; as such, the returns of the new benchmark are more representative of the returns experienced by investors in foreign issuers. Historical benchmark performance has been restated accordingly. 

31-May-2020 - Sebastien Mallet, Portfolio Manager,
Following strong performance in April, global equities continued to rebound in May on the back of optimism about the gradual reopening of the global economy. This helped to offset fears of a second wave of coronavirus infections and increased U.S.-China tensions, particularly in respect to Hong Kong. In Europe, positive sentiment was also fuelled by proposals for the adoption of more stimulus measures. In China, data suggested a rebound in industrial enterprise profits while some monthly economic data releases beat the market consensus by a comfortable margin, particularly in the case of industrial production. At the portfolio level, stock selection within information technology (IT) held back returns, particularly due to several of our semiconductor-related holdings; the industry as a whole sold off on news that the Trump administration had taken steps to block shipments of semiconductors to Huawei Technologies, which put downward pressure on share prices. By contrast, our choice of securities within consumer discretionary served us well. In particular, shares in Hope Education, which operates schools and colleges in mainland China, was a top contributor. Its business is viewed as defensive in part because it has one of the least leveraged balance sheets within its industry group.

Holdings

Total
Holdings
91
Largest Holding NextEra Energy 3.51% Was (31-Dec-2019) 2.38%
Other View Full Holdings Quarterly data as of 31-Mar-2020
Top 10 Holdings 19.85% View Top 10 Holdings Monthly data as of 31-May-2020

Largest Top Contributor^

UnitedHealth Group
By 0.03%
% of fund 1.33%

Largest Top Detractor^

GE
By -0.57%
% of fund 2.38%

^Absolute

Quarterly Data as of 31-Mar-2020

Top Purchase

Novartis (N)
1.61%
Was (31-Dec-2019) 0.00%

Top Sale

Pfizer (E)
0.00%
Was (31-Dec-2019) 1.47%

Quarterly Data as of 31-Mar-2020

31-Mar-2020 - Sebastien Mallet, Portfolio Manager,

As developments around the coronavirus outbreak evolved, the market pull-back created many opportunities, particularly in out-of-favor cyclicals. Conversely, some defensive names that outperformed appeared to be less attractively valued. In light of the sell-off, our strategy was to upgrade the portfolio, selling down defensives and buying cyclical names that had seen substantial price drops and where we believe there is significant potential upside. For example, we bought a new position in SSP, a UK-based operator of branded catering and retail units in airports and railway stations, whose trade volumes were down around 80% as a result of containment restrictions.

Over the course of the first quarter, we made a number of adjustments to our individual holdings within sectors. We reduced the extent of our overweight to financials. We raised the portfolio's exposure to the communication services sector, initiating a position in Facebook which we view as a quality cyclical and a play on advertising spend. We started adding to our energy exposure as we believed that the price of oil had fallen to an unsustainable level, although we are mindful that in the short-term the price could fall further. Within the industrials space, we made a number of switches to our positions.

On a country basis, we began raising the weighting to China as the country became the first to restart its economy and ease travel restrictions following the coronavirus outbreak. For example, we initiated a position in Trip.com, an online travel agent in the country.

Our major overweight sector positions at the end of March were utilities, financials, and energy. The largest underweight sector positions included IT, consumer discretionary, and consumer staples.

Financials

As the quarter began, the portfolio had a substantial overweight to financials. Over the quarter we reduced our exposure but remained overweight. We did this through reducing our position in high quality names such as J.P. Morgan Chase and using part of the proceeds of this sale to build positions in 'bombed-out' insurers and capital markets players.��

  • J.P. Morgan Chase: The U.S.-based bank represents an even mix of retail and wholesale businesses. While it appears to be a long-term scale winner trading at a fair premium, less idiosyncratic drivers from here make the bank increasingly exposed to industry headwinds.
  • Charles Schwab: We purchased shares in the savings and loan holding company, which engages in the provision of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company is a premier franchise that stands to gain from the eventual increase in interest rates and is well-positioned versus its competitors. In the long-term, we believe that the company can deliver durable earnings growth as it continues to gather assets, drive scale efficiencies, and grow its bank with low cost brokerage sweep deposits.

Health Care

As the quarter began, the portfolio had a modest underweight to health care names. We made a number of switches to our holdings, leaving us with a small overweight position. We initiated positions in Novartis and UnitedHealth, funding this in part through the elimination of our position in Pfizer.

  • Novartis: We initiated a position in this Swiss multinational healthcare company, which is engaged in the development, manufacture and sale of pharmaceutical products. We expect the company to grow net sales at an average rate of 5% over the next five years. Strong margin expansion driven by positive mix effects, cost-saving initiatives and share repurchases should drive average earnings growth over the same period. ���

  • UnitedHealth: We initiated a holding in the well-diversified healthcare services company, which is based in the U.S. The company looks well-placed to weather the current crisis and to remain undisrupted by the outcome of the U.S. election later this year. We expect the company to achieve low-teens earnings growth in 2020-2023 as a result of improving Medicare performance, continued growth in the Medicaid businesses, an exit of the exchanges business, and a disruption of peers due to deal-related distraction.

  • Pfizer: We eliminated our position in order to invest in higher-conviction names in this space, which we believe offer higher innovation potential. We believe that management has damaged their credibility somewhat through poor business development decisions and weak judgment on guidance.

Energy

We raised the portfolio's exposure to energy as oil prices had reached levels that were below the marginal cost of production and because we felt they were unsustainably low beyond the short term. We topped up existing holdings in a number of names, including Pioneer, and built a new position in Chevron.

We partially funded these purchases by selling out of BP, the British integrated oil and gas company. The company was hit hard by the drop in the oil price and over the quarter management announced a reduction in capital expenditure and reduced production guidelines. This potentially increases the risk of the company not reaching its divestment targets, which would impact cashflow.

Industrials and Business Services

We retained a modest overweight within industrials and business services but we made a number of changes to our holdings within the sector. We eliminated our holding in Compania de Distribucion Integral Logista and used the proceeds to fund a position in Toshiba.

  • Companies de Distribucion Integral Logista: This Spanish company provides integrated and specialized logistics management services for the tobacco, high-value documents, transportation tickets, telephone cards and recharges, lottery games, pharmaceutical products, books, and periodicals sectors in Europe. The tobacco industry remains under pressure as consumers become increasingly health conscious.

  • Toshiba: We built a position in the Japanese conglomerate which engages in the manufacture and sale of electronic and electrical products. Management have recently refocused their attention to the most profitable areas of the business, including a semi-conductor company in which it owns a 40% stake. We found an attractive entry point to initiate a holding in the stock.

Sectors

Total
Sectors
11
Largest Sector Financials 17.96% Was (30-Apr-2020) 17.86%
Other View complete Sector Diversification

Monthly Data as of 31-May-2020

Indicative Benchmark: MSCI World Index

Top Contributor^

Real Estate
Net Contribution 0.39%
Sector
0.00%
Selection 0.39%

Top Detractor^

Financials
Net Contribution -1.55%
Sector
-0.81%
Selection
-0.74%

^Relative

Quarterly Data as of 31-Mar-2020

Largest Overweight

Financials
By5.22%
Fund 17.96%
Indicative Benchmark 12.74%

Largest Underweight

Information Technology
By-7.38%
Fund 12.77%
Indicative Benchmark 20.15%

Monthly Data as of 31-May-2020

31-May-2020 - Sebastien Mallet, Portfolio Manager,
In May, we continued to add to some positions in sectors and individual stocks which had fared the worst in the first quarter. We are favouring more cyclical companies and “deep value” stocks as we believe that their valuations have become more appealing. We also initiated a position in pharmacy group Matsumotokiyoshi. At the beginning of the coronavirus outbreak, we assumed that this would be one of the hardest hit areas in Japan due to falling demand from Chinese tourists. However, the company benefitted from increased Japanese consumer demand for sanitary goods from these stores.

Regions

Total
Regions
5
Largest Region North America 62.16% Was (30-Apr-2020) 59.94%
Other View complete Region Diversification

Monthly Data as of 31-May-2020

Indicative Benchmark: MSCI World Index

Top Contributor^

Japan
Net Contribution 0.31%
Region
0.05%
Selection 0.26%

Top Detractor^

United States
Net Contribution -4.40%
Region
-0.17%
Selection
-4.23%

^Relative

Quarterly Data as of 31-Mar-2020

Largest Overweight

Europe
By2.72%
Fund 21.96%
Indicative Benchmark 19.24%

Largest Underweight

North America
By-6.59%
Fund 62.16%
Indicative Benchmark 68.75%

Monthly Data as of 31-May-2020

Countries

Total
Countries
17
Largest Country United States 57.87% Was (30-Apr-2020) 55.36%
Other View complete Country Diversification

Monthly Data as of 31-May-2020

Indicative Benchmark: MSCI World Index

Largest Overweight

China
By3.22%
Fund 3.24%
Indicative Benchmark 0.02%

Largest Underweight

United States
By-7.79%
Fund 57.87%
Indicative Benchmark 65.66%

Monthly Data as of 31-May-2020

Team (As of 02-Jul-2020)

Sebastien Mallet

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Mallet has 19 years of investment experience, 14 of which have been at T. Rowe Price. Prior to joining the firm in 2005, he was a telecom banker at Credit Suisse First Boston in the Tokyo and London offices. Mr. Mallet started his career as a financial analyst with France Telecom, based in Guangzhou, China, and Madrid, Spain.

Mr. Mallet earned an M.A., with honours, in finance from the University of Paris and an M.B.A. from the London Business School.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    19

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 160 basis points 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.85%

Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.

Dismiss
Tap to dismiss

Download

Latest Date Range
Audience for the document: Share Class: Language of the document:
Download Cancel

Download

Share Class: Language of the document:
Download Cancel
Sign in to manage subscriptions for products, insights and email updates.
Continue with sign in?
To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
Continue Cancel
Once registered, you'll be able to start subscribing.

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest