SICAV

Global Focused Growth Equity Fund

Concentrating high conviction positions in leading global investment prospects.

ISIN LU0143563046 WKN 541556

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

21.67%
$2.9b

1YR Return
(View Total Returns)

Manager Tenure

43.46%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

1.35
6.78%

Inception Date 12-Jan-2006

Performance figures calculated in USD

Other Literature

31-Aug-2020 - David J. Eiswert, Portfolio Manager,
We remain cautiously optimistic but recognise that a sustained economic recovery will largely depend on containing the coronavirus. We continue to focus on businesses that are reasonably valued and that will likely survive and grow on the other side of this recession. We are thinking creatively to determine which stocks will likely benefit from secular change, now and over time, as well as more cyclical areas that are undervalued but still have good growth drivers.
David J. Eiswert, CFA
David J. Eiswert, CFA, Lead Portfolio Manager

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Equity markets staged a dramatic rally in the second quarter despite poor economic data as the combination of extraordinary monetary and fiscal stimulus, some success in slowing the spread of the coronavirus through social distancing measures, and early signs of progress in vaccine and therapy development helped fuel investor optimism. However, not all of the concerns that battered markets in March have been dispelled, and valuation now joins the list of near-term risks we are monitoring along with concerns of a coronavirus second wave; rising China-U.S. tensions; and the impending, likely highly divisive, U.S. election cycle.�

We don't know with exact certainty how the pandemic will play out from here, how countries will deal with possible second waves of outbreaks and beyond, or how long it will take to produce an effective vaccine. Even though we continue to navigate these uncertain waters, we do believe we have reached the "stop getting worse" phase and are seeing signs of economic improvement.

The conundrum we currently face is that many of our long-term investments are secular growth names, which are trading at high valuations or are very crowded, while beaten down areas of the market have structural questions around their ability to survive. We are trying to be carefully contrarian by moderating positions in the most expensive secular growth names that have worked well during the initial phases of the health crisis and are looking around the world to find where value is presenting opportunity in quality growth stocks.

We think there are selective pockets in emerging markets ex-China, such as India and Indonesia, that offer compelling risk/reward profiles given our view that the risks on the fiscal side are not as dire as the market is pricing. We are not making radical changes to the portfolio, but we want to have a healthy balance of being carefully contrarian while also having exposure to secular growth ideas that we think still have long runways for growth in the years to come.

We remain cautiously optimistic that the economic improvement we had begun to see in the fourth quarter of last year and the beginning weeks of this year has only been delayed and not canceled. However, we recognize that a sustained economic recovery largely depends on containing the coronavirus in the second half of 2020 and beyond. We continue to focus on businesses which are reasonably valued and will survive and grow on the other side of this recession. We are thinking creatively to determine which stocks will benefit from secular change, now and over time.�We have more insights from our global research platform than most and, as a result, have more stock-specific risk management tools at our disposal than most. That matters more in extreme periods, and this is an environment that has been defined by extremes.

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 that have the potential for above average and sustainable rates of earnings growth. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Single decision maker provides clear accountability.
  • Identify “best ideas” by assessing companies in a global sector context, using bottom-up approach to create focused, high- conviction portfolio.
  • Global research platform uses fundamental analysis to identify companies with superior and sustainable growth prospects, and improving fundamentals.
  • Macroeconomic and local market factors are integrated in stock selection decisions.
  • Valuation appeal is measured against local market and broad sector opportunity set.
  • Broad range of stocks across all capitalizations, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: typically 60-80 stocks
  • Individual positions: Typically 0.5%-5.0%
  • Emerging markets exposure: +/-15% of benchmark
  • Broad sector ranges: +/-15% of benchmark
  • Country ranges: +/-10% of benchmark (U.S.A. is +/-20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%, Maximum 10%
  • Expected tracking error: 400 to 800 basis points

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 43.46% 21.67% 19.37% 15.60% 17.50%
Indicative Benchmark % 16.52% 8.99% 10.21% 9.90% 9.58%
Excess Return % 26.94% 12.68% 9.16% 5.70% 7.92%

Inception Date 12-Jan-2006

Manager Inception Date 30-Sep-2012

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Aug-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 22.04% 16.02% 14.67% 14.10%
Indicative Benchmark % 2.11% 6.14% 6.46% 9.16%
Excess Return % 19.93% 9.88% 8.21% 4.94%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Jun-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 25-Sep-2020 Quarter to DateData as of 25-Sep-2020 Year to DateData as of 25-Sep-2020 1 MonthData as of 31-Aug-2020 3 MonthsData as of 31-Aug-2020
Fund % -4.95% 11.25% 22.04% 6.67% 22.36%
Indicative Benchmark % -4.99% 6.16% -0.48% 6.12% 15.30%
Excess Return % 0.04% 5.09% 22.52% 0.55% 7.06%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country 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-Aug-2020 - David J. Eiswert, Portfolio Manager,
Global equities produced robust returns in August amid continued accommodative central bank policies, positive news surrounding the coronavirus pandemic, and a stronger-than-expected corporate earnings season. Within the portfolio, stock selection and an underweight position in consumer staples contributed the most to relative returns. Although Estee Lauder reported weak earnings results, its shares spiked due to accelerating online sales and several analyst upgrades. We continue to like Estee Lauder due to its diversified business model, long runway for growth in China, and a healthy balance sheet, all while operating in a structurally attractive industry. Conversely, health care names held back relative returns the most. For instance, Exact Sciences lost steam following a strong run in the previous period, and broader lacklustre performance in the sector also weighed on the stock. We still have high conviction in the company’s revolutionary non-invasive colorectal cancer screening test Cologuard.

Holdings

Total
Holdings
79
Largest Holding Amazon.com 3.57% Was (31-Mar-2020) 3.47%
Other View Full Holdings Quarterly data as of 30-Jun-2020
Top 10 Holdings 30.49% View Top 10 Holdings Monthly data as of 31-Aug-2020

Largest Top Contributor^

Amazon.com
By 0.51%
% of fund 3.59%

Largest Top Detractor^

Charles Schwab
By -0.22%
% of fund 1.25%

^Absolute

Quarterly Data as of 30-Jun-2020

Top Purchase

Morgan Stanley (N)
3.49%
Was (31-Mar-2020) 0.00%

Top Sale

Visa (E)
0.00%
Was (31-Mar-2020) 3.07%

Quarterly Data as of 30-Jun-2020

30-Jun-2020 - David J. Eiswert, Portfolio Manager,

Trading activity during the quarter was driven from the bottom up. With the valuation spread between growth and value at extreme levels, we're slowly moving the portfolio out of the most expensive secular growth names and into cheaper, quality growth names. We have started or added to several positions that we view as more idiosyncratic that focus on eclectic areas such as construction equipment rentals, travel, financials, and timber/paper products. These trades provide the portfolio with a healthy balance of being carefully contrarian while also allowing us to maintain exposure to long-term secular growth winners.

Sector-wise, our allocations to industrials and business services and financials increased, as these are areas where we think there are high-quality, idiosyncratic opportunities that are being undervalued. On the other hand, we reduced our exposure to information technology and health care, trimming or eliminating names that performed well during the market rally. Regionally, our exposure to developed Europe increased, while our allocation to North America decreased.

Information Technology

We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. The powerful long-run trends that we believe will drive value creation in the technology sector still remain and, in some cases, have been accelerated by the ongoing pandemic. Aftereffects from the virus outbreak could also result in lasting behavioral changes, with more people working remotely and payment methods skewing more digitally. As a result, software and electronic payments are areas of focus for our sector exposure, but we also remain positioned to benefit from increasing artificial intelligence adoption as well as the growing technology consumption in emerging markets, particularly in Asia. We also have a sizable exposure to semiconductor stocks that we anticipate should benefit from content growth in automotive and industrial end markets as well as investment in data centers and artificial intelligence.

  • We initiated a position in MasterCard. The company has a leading position in global payments along with Visa, operating in an industry with high barriers to entry, secular tailwinds driven by continued migration from cash to electronic payments, and high incremental margins. In particular, we like MasterCard's focus on technology, planned expansion into China, and attractive valuation. While volume growth has come down due to the coronavirus, we think the firm is well positioned for accelerating returns on the other side of the pandemic.
  • We initiated a position in payment service provider Square. Square serves mostly smaller businesses and merchants that have been hit hard by social distancing and business closures due to the coronavirus. However, we think that while the coronavirus represents a near-term headwind, over the long term, Square is on the right side of change and is well positioned for accelerating returns on the other side of the pandemic.
  • We eliminated our position in Visa. Although we still think Visa is a high-quality company in a structurally advantageous industry, we prefer MasterCard for its greater focus on payment technologies and innovations, faster growth, and attractive valuation.
  • We eliminated our position in Salesforce.com. The stock has been a solid performer during the time we have owned it, and we now think valuation is full and chose to exit our position.

Financials

We are modestly underweight financials, though we have reduced our underweight significantly in recent months as we took advantage of severe market dislocation in the sector. Traditional developed market financials are facing a difficult environment as leading central banks have cut rates and ramped up quantitative easing measures to help counteract the negative economic impact from the coronavirus. Within the sector, we have exposure to nontraditional financials such as security exchanges that have low correlation to the rest of the portfolio and provide support with volatility, online brokerages that don't have the credit risk exposure of banks, and select emerging market banks that we think are undervalued and underappreciated.

  • We started a position in global investment bank Morgan Stanley. We think Morgan Stanley has resilient underlying business segments in wealth management and investment management that should help the firm weather the storm from the coronavirus and offset headwinds from lower interest rates and loan loss provisions. Ultimately, we think Morgan Stanley's high-quality franchise will continue to drive earnings growth over the long term, and with a compelling valuation, we chose to take advantage of what we felt was an attractive entry point.
  • We eliminated our position in derivatives exchange CME Group. The stock has done well in the portfolio, and our outlook for the stock has come down in light of recent data, so we chose to exit our position.

Consumer Discretionary

The consumer discretionary sector has become increasingly challenged as market disruption, driven in part by rapid changes in consumer behavior and e-commerce, has led to a more dramatic demarcation between winners and losers. Given the polarized structure of the sector, our focus is on high-quality names that are on the right side of change and have dominant market positions. We find internet-based media and select retailing companies particularly attractive, but most of our holdings are driven by product-specific stories.

  • We started a position in Delivery Hero, a German-based online food delivery platform. The company is the market leader in the vast majority of areas where it operates, many of which are in emerging markets with early-stage penetration. We think the company is poised to benefit from strong secular growth trends in the food delivery industry and due to the company's dominant position in growing and underpenetrated markets. The company is also in the process of acquiring Woowa Brothers, which runs South Korea's most popular delivery app Baedal Minjok. Should the deal go through, we think this would be another strong near-term growth catalyst.
  • We initiated a position in electric automaker Tesla. This is a name we have owned in the past but eliminated following a series of challenging developments in 2018. However, we now feel there are a number of strong growth drivers over the near term, including an attractive product mix, improving balance sheet health, and a unique position in the auto industry with less downside in the current environment than its competitors.
  • We eliminated our position in off-price retailer Ross Stores. The stock has held up relatively well compared with peers and spiked after reporting earnings that, while poor, were better than expected considering the challenging environment and with all stores having been closed for nearly two months. The company still faces a challenging second half of the year, and with valuation less attractive, we chose to exit our position.

Industrials and Business Services

We believe that in the current lower-growth world, many traditional industrials and business services companies have limited potential to accelerate and, as a result, are underweight the sector based on MSCI industrial classifications. As the coronavirus outbreak stalls economic activity, industrial companies face even greater hurdles to growth, at least in the near term. That being said, we have more industrial exposure than our weight would imply, as we own several semiconductor and automation companies that are classified as technology but that we view as more industrial technology.

  • Ashtead is a high-quality construction equipment rental company headquartered in the UK but with a vast majority of its business and profits in North America. We think the company is poised for accelerating returns as it continues to take market share in the U.S. and Canada, and the firm also has a history of strategic and successful mergers and acquisitions. The stock was punished earlier in the year amid concerns of evaporating demand due to the coronavirus. However, data released in April by the company showed it is holding up surprisingly well, and we think the market is underestimating the essential nature of the business, even during a pandemic, as well as the overall resilience of the construction industry in the U.S. The possibility of additional fiscal stimulus in the form of infrastructure would be another tailwind for the company.
  • We eliminated our position in aerospace engine manufacturer Safran. We first purchased shares in the company in mid-March following a sharp sell-off as coronavirus concerns crippled the airline industry. The stock subsequently staged a strong rebound, and we elected to realize profits and use proceeds to fund other names with greater growth potential.

Sectors

Total
Sectors
10
Largest Sector Information Technology 35.49% Was (31-Jul-2020) 34.97%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Information Technology
Net Contribution 5.30%
Sector
1.63%
Selection 3.67%

Top Detractor^

Materials
Net Contribution -0.13%
Sector
-0.16%
Selection
0.03%

^Relative

Quarterly Data as of 30-Jun-2020

Largest Overweight

Information Technology
By13.75%
Fund 35.49%
Indicative Benchmark 21.74%

Largest Underweight

Consumer Staples
By-5.37%
Fund 2.50%
Indicative Benchmark 7.88%

Monthly Data as of 31-Aug-2020

31-Aug-2020 - David J. Eiswert, Portfolio Manager,
We have strong conviction in the information technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. The powerful long-run trends that we believe will drive value creation in the technology sector remain and, in some cases, have been accelerated by the ongoing pandemic. The aftereffects from the virus outbreak could also result in lasting behavioural changes, with more people working remotely and payment methods skewing more digitally.

Countries

Total
Countries
19
Largest Country United States 50.04% Was (31-Jul-2020) 49.96%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

India
By2.61%
Fund 3.61%
Indicative Benchmark 1.00%

Largest Underweight

United States
By-8.43%
Fund 50.04%
Indicative Benchmark 58.47%

Monthly Data as of 31-Aug-2020

Currency

Total
Currencies
13
Largest Currency U.S. dollar 61.78% Was (31-Jul-2020) 60.94%
Other View complete Currency Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

Indian rupee
By 2.59%
Fund 3.60%
Indicative Benchmark 1.00%

Largest Underweight

Canadian dollar
By -2.75%
Fund 0.00%
Indicative Benchmark 2.75%

Monthly Data as of 31-Aug-2020

Team (As of 05-Aug-2020)

David J. Eiswert, CFA

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Mr. Eiswert has 19 years of investment experience, 16 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst at Mellon Growth Advisors and Fidelity Management and Research. He also worked as a consultant in the communications industry.

Mr. Eiswert earned a B.A., summa cum laude, in economics and political science from St. Mary's College of Maryland and an M.A. in economics from the University of Maryland, College Park. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    20
Josh Nelson

Josh Nelson is a director of research in the U.S. Equity Division of T. Rowe Price. Previously, he was an associate portfolio manager for the Global Focused Growth Equity Strategy. He is an Investment Advisory Committee member of the Global Stock Strategy. He also serves on the Equity Steering Committee. Mr. Nelson is a vice president of T. Rowe Price Group, Inc.

Mr. Nelson has 17 years of investment experience, 12 of which have been with T. Rowe Price. He served as a summer intern with T. Rowe Price in 2006, covering agricultural commodities and ethanol companies. Prior to joining the firm in 2007, he was an investment banker for Citigroup Global Markets, Inc.

Mr. Nelson earned a B.S., with honors, in industrial systems and engineering from the University of Florida. He also earned an M.B.A., with honors, in finance from the University of Pennsylvania, The Wharton School.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    18
Samuel Ruiz

Samuel Ruiz is a portfolio specialist in the Equity Division. He is a vice president of T. Rowe Price Australia Limited. 

Sam’s investment experience began in 2008, and he has been with T. Rowe Price since 2020, beginning as an associate working with the Global Equity and Australia Equity Strategies in the Equity Division. Prior to this, Sam was employed by Macquarie Investment Management in the area of strategy in the Equities Division. 

Sam earned a bachelor of applied finance degree from the University of South Australia.

  • Years at
    T. Rowe Price
    <1 year
  • Years investment
    experience
    0
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    20

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 1.72%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.80%
Class Q $1,000 $100 $100 0.00% 75 basis points 0.88%

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

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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

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