Download

Audience for the document: Share Class: Language of the document:

Download

Share Class: Language of the document:

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®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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

T. Rowe Price

Please enter valid search characters

SICAV

Continental European Equity Fund

Style-agnostic, quality-driven European equity investment.

ISIN LU0285832068 WKN A0MNMY

3YR Return Annualised
(View Total Returns)

Total Assets
(EUR)

8.29%
€132.6m

1YR Return
(View Total Returns)

Manager Tenure

6.80%
<1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.61
2.90%

Inception Date 26-Feb-2007

Performance figures calculated in EUR

Other Literature

31-Dec-2020 - Tobias Mueller, Portfolio Manager ,
The development of effective coronavirus vaccines offers the hope of a recovery from deep recession, beginning later this year. A recovery will to some extent depend on the path of the disease and the efficacy and distribution of any vaccines. In addition. the level of continuing policy support, the evolution of corporate and consumer confidence and the degree of disruption caused by newly agreed post-Brexit trading arrangements will determine the longer-term trajectory of activity.
Tobias Mueller, CFA
Tobias Mueller, CFA, Portfolio Manager

Tobias Mueller is the portfolio manager for the European Select Strategy, effective October 2018. Previously, he covered the technology, medical technology and exchange sectors as a research analyst in the Equity Division. Mr. Mueller is a vice president of T. Rowe Price International Ltd.

 

Strategy

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 diversified portfolio of stocks of companies in Europe (excluding the UK).

Investment Approach

  • Fundamental research is critical to successfully identify and assess long-term investment opportunities. We look for companies with high returns on capital and capable of providing sustainable earnings across the market cycle.
  • Style agnostic, focus on quality. By avoiding style constraints, we can invest in quality companies and maintain a balanced portfolio through market cycles.
  • Disciplined approach to valuation. We aim to buy businesses at a clear discount to their intrinsic value.
  • Risk management is essential and is assisted by diversification, quantitative analysis, and automatic stabilizers built in to our investment process.

Portfolio Construction

  • Typically 40-70 stocks
  • Individual position size up to 4.0% relative to the indicative benchmark
  • Sector ranges: typically +/- 10% relative to the indicative benchmark
  • Country ranges: typically +/- 10% relative to the indicative benchmark
  • Expected Tracking Error: typically 3.0% to 6.0%
  • Information Ratio objective: >0.5
  • Cash target range: fully invested, typically less than 5.0%
  • Turnover range: 40%-100%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 6.80% 8.29% 7.49% 9.68% 11.51%
Indicative Benchmark % 2.35% 4.91% 5.73% 7.04% 8.71%
Excess Return % 4.45% 3.38% 1.76% 2.64% 2.80%

Inception Date 26-Feb-2007

Manager Inception Date 06-May-2009

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Data as of 31-Dec-2020

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 6.80% 8.29% 7.49% 9.68%
Indicative Benchmark % 2.35% 4.91% 5.73% 7.04%
Excess Return % 4.45% 3.38% 1.76% 2.64%

Inception Date 26-Feb-2007

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Data as of 31-Dec-2020

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 19-Jan-2021 Quarter to DateData as of 19-Jan-2021 Year to DateData as of 19-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % 2.12% 2.12% 2.12% 2.27% 8.37%
Indicative Benchmark % 1.73% 1.73% 1.73% 2.29% 10.47%
Excess Return % 0.39% 0.39% 0.39% -0.02% -2.10%

Inception Date 26-Feb-2007

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Performance figures calculated in EUR

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 June 2019, 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-Dec-2020 - Tobias Mueller, Portfolio Manager ,
The FTSE All-World Developed Europe ex UK Index rose in December, lifted by the UK-European Union (EU) trade accord, the approval of a U.S. fiscal stimulus package and optimism surrounding coronavirus vaccinations. However, the emergence of a new variant of the virus raised the prospect of a slower economic recovery and curbed gains. At the portfolio level, stock picking in consumer discretionary, industrials and materials drove relative performance. Conversely, an underweight in information technology (IT) and negative stock selection in financials were modest drags. In consumer discretionary, luxury fashion company Prada rose strongly after ramping up marketing, which has helped generate strong brand momentum in the wake of new designer Raf Simons’ first joint Prada fashion show in September. On the negative side, Swedbank, a high-quality Swedish bank, underperformed after the European Central Bank injected more stimulus into the continental economy and extended its ultra-loose monetary policy. Earnings in the year ahead face headwinds from low interest rates and reduced demand for financial services due to the coronavirus.

Holdings

Total
Holdings
60
Largest Holding Roche Holding 4.00% Was (30-Sep-2020) 4.36%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 27.75% View Top 10 Holdings Monthly data as of  31-Dec-2020

Largest Top Contributor^

ASML Holding
By 1.44%
% of fund 3.77%

Largest Top Detractor^

Roche Holding
By -1.70%
% of fund 3.99%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Topdanmark (N)
0.89%
Was (30-Sep-2020) 0%

Top Sale

SAP (E)
0.00%
Was (30-Sep-2020) 3.06%

Quarterly Data as of 31-Dec-2020

30-Sep-2020 - Tobias Mueller, Portfolio Manager ,

New Manager Seeks Quality Names on Right Side of Change

Toby Mueller, the manager of the European Select Strategy, joined Dean Tenerelli as co-portfolio manager of the Europe Equity and Europe ex-UK Equity Strategies on July 1, 2020, and succeeded him as sole portfolio manager on October 1, 2020. Over the quarter, Mr. Mueller repositioned the strategy in line with his process and philosophy, namely seeking quality businesses that benefit from change where the team has an insight on the key drivers for the stock.

  • He added 23 new names and exited 18, which is a turnover of 44%. These changes have led to a modest increase in momentum and growth exposures.
  • Additions were made either to ensure the European Ex-Equity Strategy held the same Continental names as� the concentrated European Select Strategy (namely stocks that we believe are on the "right side of change" and in which we have an insight) and suitable alternatives for UK stocks or to broaden the risk profile of the strategy.
  • We sold those stocks that were not compliant with our focus, such as being unattractive from an environmental, social, and governance perspective, being on the wrong side of change, or where the thesis had played out and we lack an insight.
  • Considerable activity in some sectors resulted in little overall change in relative positioning. The number of trades in absolute terms better reflects the adjustments that have been made in certain sectors.
  • In absolute terms, industrial and business services, financials and health care saw the most trades, followed by consumer staples, utilities, consumer discretionary, and information technology (IT). Industrial and business services, health care, consumer discretionary, and materials remain the largest absolute sector positions.
  • In relative terms, consumer discretionary, industrials and business services and materials are the largest allocations; consumer staples, energy, and real estate are the smallest. We now have a greater exposure to the IT and health care sectors and a smaller one to industrials and business services and energy, an industry that we believe faces structural challenges over the medium term.

Industrials and Business Services

We pruned our exposure to industrials and business services, which is our largest absolute allocations, after adjusting the composition of our holdings. We also wanted to reduce the sector weighting because the rally in cyclical industrials lost steam and investors rotated into cyclical value names.

We added four stocks, including Siemens, a global industrial company operating in the power and gas, digital factory, and process industries and in renewables markets; Assa Abloy, a global leader in security lock products and solutions; and Knorr-Bremse, which develops, produces, markets, and services braking systems for rail and commercial vehicles. We exited three stocks: France-based Schneider Electric, a leading global specialist in energy management and automation; Germany-based GEA Group, which provides technology and components for the food processing industry worldwide; and Sandvik, a Swedish company that provides tools and solutions in the fields of mining, metal cutting, and advanced materials. �

Our largest industry exposures remain machinery, although we pared this overweight,�professional services, and building products. We are also overweight industrial conglomerates. We moved to an underweight in electrical equipment.

  • Siemens' organic growth, margins, and returns could well increase more than the market expects due to several underappreciated factors. The company could be a large beneficiary from the so-called fourth industrial revolution, or the use of modern smart technology to automate traditional manufacturing and industrial practice; productivity and cost-cutting efforts could also be faster than expected; and the stock could rerate as Siemens becomes a more focused industrial company and non-core businesses are sold.
  • We sold our holding in Germany-based GEA Group, which provides technology and components for the food processing industry worldwide, to recycle funds into better opportunities. Under the new chief executive officer, restructuring measures and cost-cutting to offset the impact of the coronavirus are helping the company to restore margins, but a transformation may take longer than expected in a de-globalizing world.

Financials

We adjusted our holdings in financials, moving from an underweight to a neutral allocation. We invested in five new names and sold our holdings in five, mainly banks and insurance stocks. We opened positions in Finnish holding company Sampo, which owns a non-life business, a domestic life insurer, and a stake in Nordea Bank; Sweden-based Swedbank, a leading high-quality retail bank; and Erste Group Bank, one of the largest lenders in Austria and central Europe. Our exits included Allianz, one of the largest global insurers and an asset manager; Nordea, the largest financial services provider in the Nordic region; and Bankinter, a Spain-based financial company primarily engaged in banking.

After these moves, we have a neutral weight in banks and insurance and a modest overweight in capital markets, where we increased our allocation.

  • We invested in Sampo because the non-life business is accelerating, driven by one of the most favorable market environments in over 20 years, and the return on equity in the insurance business is around 20%. We believe the management is increasingly likely to break up the company's existing structure by selling its stake in Nordea, which should help Sampo to rerate in line with its best-in-class peers.
  • We sold our holding in Allianz after it issued a profit warning for the first quarter and withdrew profit guidance for the year. We believe the impact of the coronavirus on the non-life business is unlikely to be contained in the first quarter and that the potential impact on earnings is being underestimated by the market.

Health Care

We rearranged our holdings in the health care sector, where we trimmeded our underweight exposure. We added four names, among them Alcon, a Switzerland-based manufacturer of eye care devices; Lonza Group, a Switzerland-based holding company and supplier to the pharmaceutical, health care, and life science industries; and Evotec, Europe's largest contract research organization that aims to be a one-stop outsourcing shop for all preclinical activities for the pharmaceutical industry. We eliminated two investments: Novo-Nordisk, a Danish pharmaceutical company that develops, manufactures, and distributes health care products, and Getinge, a Swedish medical technology company that provides surgical products and operating room supplies.

We raised our overweight in biotechnology, our largest allocation, and moved to an overweight in life sciences tools and services. We increased underweights in pharmaceuticals and health care equipment and supplies.

  • Alcon, a Switzerland-based manufacturer of eye care devices, has continued to invest through the period to be stronger on the other side of the crisis. We believe the business could rebound strongly next year as underlying conditions normalize and cataract operations return to their usual levels.
  • We exited Getinge because demand for ventilators fueled by the coronavirus pandemic had run its course, and the much larger part of the business is focused on activities such as elective procedures that are being curbed by the virus.

Consumer Discretionary

The consumer discretionary sector became our largest overweight allocation after we added two new names: Ferrari, a maker of high-performance supercars and a constructor team in F1 racing and Adidas, the world's second-biggest sportswear company. We sold Autoliv, a supplier of automotive safety systems.

We reduced our underweight in autos and moved to a neutral position in auto components. We also pared our underweight in textiles, apparel, and luxury goods. Our largest overweights are household durables and leisure products.

  • Ferrari makes high-performance supercars and participates as a constructor team in Formula One racing. Ferrari has a strong brand image as a unique maker of luxury autos with lucrative pricing power and a long waiting list among high-net-worth individuals. We believe earnings growth will be strong and sustainable over the medium term.
  • We exited Autoliv, taking advantage of the rebound in the share price since the March downturn to book profits and recycle them into higher-conviction names. In our view, the continuing coronavirus pandemic points to a slower economic recovery that is likely to dampen demand in the auto industry.�

Consumer Staples

We reduced our underweight allocation to the consumer staples sector, although it remains our biggest underweight exposure. We sought to diversify and reduce the size of our positions in the sector and sold the largest holding in the portfolio, Nestl�, which is the world's biggest processed food manufacturer. We initiated positions in Jeronimo Martins, a Portugal-based food retailer with operations in Poland and Colombia; Barry Callebaut, a large innovative manufacturer of chocolate and cocoa products, processing a quarter of the world's cacao beans; and Davide Campari-Milano, a family-owned Italy-based company that is the sixth-largest spirits producer globally.

Utilities

We pruned our underweight exposure to utilities. We started new investments in Iberdrola, a Spain-based integrated energy utility that operates in the renewables, electricity transmission, and distribution markets, and Terna Rete Elettrica Nazionale, an independent electricity grid operator. We sold Italgas, Italy's biggest gas distributor, and E.ON, a German energy company that operates in power generation, renewables, global commodities, and exploration and production.

  • Iberdrola is a Spain-based integrated energy utility operating in the renewables, electricity transmission, and distribution markets in the UK, the U.S., Spain, Portugal, and Latin America. Iberdrola is well run, has executed well, has a sizable renewables business, and is present in markets with rich growth opportunities. The company is at the forefront of Europe's transition to a greener economy emphasizing renewable energy, which should also drive long-term growth prospects.

Sectors

Total
Sectors
11
Largest Sector Industrials & Business Services 19.26% Was (30-Nov-2020) 18.99%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index

Top Contributor^

Consumer Staples
Net Contribution 0.60%
Sector
0.61%
Selection -0.01%

Top Detractor^

Financials
Net Contribution -0.81%
Sector
0.13%
Selection
-0.94%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Consumer Discretionary
By4.75%
Fund 16.78%
Indicative Benchmark 12.03%

Largest Underweight

Consumer Staples
By-5.81%
Fund 4.94%
Indicative Benchmark 10.75%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Tobias Mueller, Portfolio Manager ,
There was little positioning activity in December because most of the intended changes to the portfolio have now been implemented in line with Tobias Mueller’s investment philosophy, namely seeking quality businesses that benefit from change where the team has an insight on the key drivers for the stock. We added to cyclical stocks in the industrials and consumer discretionary sectors that will likely benefit from an economic recovery. We also trimmed some of our holdings in the IT sector that performed strongly and we judge are looking expensive.

Countries

Total
Countries
12
Largest Country Switzerland 19.02% Was (30-Nov-2020) 19.28%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index

Top Contributor^

Switzerland
Net Contribution 0.87%
Country
0.07%
Selection 0.81%

Top Detractor^

France
Net Contribution -1.54%
Country
-0.39%
Selection
-1.15%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Italy
By6.51%
Fund 11.46%
Indicative Benchmark 4.96%

Largest Underweight

France
By-10.47%
Fund 11.57%
Indicative Benchmark 22.03%

Monthly Data as of 31-Dec-2020

30-Sep-2019 - Dean Tenerelli, Portfolio Manager ,
We deepened our underweight allocation in consumer staples, the largest in the portfolio, by selling Essity Aktiebolag, a global hygiene products company, taking profits after a strong run. In our view, the margin-improvement thesis has largely played out and is factored into the share price. Raw material prices have also started to decline, and the company could find it more challenging to maintain price increases. Consequently, the shares may struggle to rise much further. In contrast, we increased our overweight exposure to industrial and business services, health care and real estate.

Team (As of 15-Jan-2021)

Tobias Mueller, CFA

Tobias Mueller is the portfolio manager for the European Select Strategy, effective October 2018. Previously, he covered the technology, medical technology and exchange sectors as a research analyst in the Equity Division. Mr. Mueller is a vice president of T. Rowe Price International Ltd.

Mr. Mueller has 13 years of investment experience, eight of which have been with T. Rowe Price. He completed an internship at the firm in 2010, and prior to joining T. Rowe Price in 2011, he worked at Lehman Brothers in the Principal Finance Group, London, where he focused on distressed fixed income assets.

Mr. Mueller has earned an M.B.A. from the University of Chicago Booth School of Business and is a graduate of business administration from the University of Applied Sciences in Munich, Germany. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2020
  • Years at
    T. Rowe Price
    9
  • Years investment
    experience
    14
Andrew Clifton

Andrew Clifton is a portfolio specialist in the Equity Division at T. Rowe Price. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Clifton has over 30 years of investment experience, nine of which have been at T. Rowe Price. Prior to joining the firm in 2010, he was an executive director at UBS Global Asset Management. Prior to that, he was a vice president at Merrill Lynch.

Mr. Clifton earned a B.Sc. in economics from the London School of Economics and an M.Sc. in econometrics from the University of Southampton.

  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    31

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class I €2,500,000 €100,000 €0 0.00% 65 basis points 0.75%
Class Q €1,000 €100 €100 0.00% 65 basis points 0.82%

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