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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

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SICAV

US Smaller Companies Equity Fund

Seeks capital appreciation using both value and growth approaches.

Important Information: Read the 19/11/2020 press release regarding a proposal to launch a new investment advisor. 

ISIN LU1047868630 Bloomberg TRPIHEU:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

18.49%
$3.4b

1YR Return
(View Total Returns)

Manager Tenure

73.22%
2yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.66
6.32%

Inception Date 31-Mar-2014

Performance figures calculated in EUR

31-Mar-2021 - Curt Organt, Portfolio Manager ,
We are seeing signs of an economic rebound but are cognisant of the fact that asset prices appear to be getting ahead of the recovery. Additionally, there is the potential headwind of rising interest rates and a corporate tax hike, which could weigh on equities. While we take these macroeconomic factors into consideration, they do not drive portfolio construction and we maintain our focus on long-term investment outcomes.
Curt J. Organt, CFA
Curt J. Organt, CFA, Portfolio Manager

Curt Organt is the portfolio manager of the US Smaller Companies Equity Strategy and an associate portfolio manager of the US Small-Cap Core Equity Strategy in the U.S. Equity Division. Curt is a vice president and an Investment Advisory Committee member of the US Small-Cap Core Equity, US Diversified Small-Cap Value Equity, and US Small-Cap Growth Equity Strategies. He also is a vice president of T. Rowe Price Group, Inc.

 

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 widely diversified portfolio of stocks from smaller capitalization companies in the United States.

Investment Approach

  • Focus on companies within the market cap range of the Russell 2500 Index at time of purchase.
  • Assess valuation using relevant sector/industry metrics — absolute and relative price to earnings, price to cash flow, and price to assets.
  • Integrate fundamental research by a dedicated Small-Cap research team to discover underfollowed companies possessing clear business plans, financial flexibility, and proven management teams.
  • Identification of a “value creation” catalyst is key.
  • Broadly diversify holdings to manage portfolio risk profile.
  • Employ a low turnover and patient trading strategy to promote full value realization.

Portfolio Construction

  • 200-250 securities
  • Position sizes typically range from 0.15% to 2.50%
  • Primary sector weights generally vary from 0.5X to 2.0X the Russell 2500 Index weights

Performance (Class In | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 73.22% 18.49% 16.99% 13.01% 24.04%
Indicative Benchmark % 85.46% 11.88% 12.84% 9.03% 17.74%
Excess Return % -12.24% 6.61% 4.15% 3.98% 6.30%

Inception Date 31-Mar-2014

Manager Inception Date 31-Mar-2019

Indicative Benchmark: Russell 2500 Index Net 30% Hedged to EUR

Data as of 31-Mar-2021

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 73.22% 18.49% 16.99% 13.01%
Indicative Benchmark % 85.46% 11.88% 12.84% 9.03%
Excess Return % -12.24% 6.61% 4.15% 3.98%

Inception Date 31-Mar-2014

Indicative Benchmark: Russell 2500 Index Net 30% Hedged to EUR

Data as of 31-Mar-2021

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 21-Apr-2021 Quarter to DateData as of 21-Apr-2021 Year to DateData as of 21-Apr-2021 1 MonthData as of 31-Mar-2021 3 MonthsData as of 31-Mar-2021
Fund % 1.70% 1.70% 9.52% 1.16% 7.69%
Indicative Benchmark % 2.70% 2.70% 13.65% 1.55% 10.66%
Excess Return % -1.00% -1.00% -4.13% -0.39% -2.97%

Inception Date 31-Mar-2014

Indicative Benchmark: Russell 2500 Index Net 30% Hedged to EUR

Indicative Benchmark: Russell 2500 Index Net 30% Hedged to EUR

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-Mar-2021 - Curt Organt, Portfolio Manager ,
U.S. stocks rose in March, lifted by the accelerating rollout of coronavirus vaccines, favourable economic data, and expectations for new federal fiscal stimulus measures. At the portfolio level, stock selection in materials had the most negative impact on relative results, specifically our holding in Quaker Chemical. The company, a leading formulator of process chemicals for customers in steel and other cyclical industries, posted solid quarterly results as the integration of Houghton continued to progress. Shares pulled back, however, on more muted forward guidance given rising input costs. Our holdings in the financials and consumer discretionary sectors also hindered performance. Conversely, an overweight position in industrials and business services added value. Within the sector, road and rail companies performed best. J.B. Hunt Transport Services is a diversified domestic transportation company that provides rail intermodal service, truckload service, and freight brokerage. The expectation for accelerating intermodal volume growth coupled with improved pricing in 2021 sent shares higher. Information technology (IT) also added value, primarily due to an underweight position in the sector, which finished the period with negative returns.

Holdings

Total
Holdings
181
Largest Holding Avery Dennison 1.53% Was (31-Dec-2020) 1.47%
Other View Full Holdings Quarterly data as of  31-Mar-2021
Top 10 Holdings 12.81% View Top 10 Holdings Monthly data as of  31-Mar-2021

Largest Top Contributor^

Avery Dennison
By 0.19%
% of fund 1.53%

Largest Top Detractor^

CoStar Group
By -0.31%
% of fund 1.20%

^Absolute

Quarterly Data as of 31-Mar-2021

Top Purchase

Darling Ingredients (N)
0.82%
Was (31-Dec-2020) 0%

Top Sale

ConocoPhillips (E)
0.00%
Was (31-Dec-2020) 0%

Quarterly Data as of 31-Mar-2021

31-Dec-2020 - Curt Organt, Portfolio Manager ,

We do not make sector "bets," and sector weightings are formed as a residual of our bottom-up investment process. There were no major thematic changes to portfolio positioning in the quarter. We continued to invest in companies that we believe offer compelling long-term investment opportunities, and we trimmed exposure to names that performed strongly and appreciated beyond our typical market capitalization range. During the quarter, trading activity spanned the various sectors. We've highlighted some of the larger purchases and sales occurring within consumer discretionary, industrials and business services, health care, and utilities.

Consumer Discretionary

We are underweight the benchmark allocation within the consumer discretionary sector, where our largest allocations are to the hotels, restaurants, and leisure; diversified consumer services; and specialty retail industries. Despite our underweight, we continue to believe the sector is ripe with select names that provide attractive business models and insulated growth opportunities. Coronavirus-related pressures on the sector have created compelling investment opportunities.

  • Shares of Domino's Pizza pulled back as cost headwinds, including the expense of COVID-19-related safety measures and higher food costs, overshadowed strong topline growth. We took this opportunity to increase the portfolio's position. We view these issues as temporary and believe sustained operating momentum and healthy liquidity position Domino's well to secure further market share from competitors over the long term.
  • We eliminated Dunkin' Brands upon the announcement that the company agreed to be acquired by Inspire Brands at a premium valuation.
  • Shares of Darden, the largest casual dining restaurant company in the U.S., surged on positive vaccine news and the implications of a return to full-capacity dining. We sold our position to fund higher-conviction ideas in the space, including Domino's.

Industrials and Business Services

In the industrials and business services sector, the portfolio is overweight compared with the benchmark allocation due in particular to sizable positions in machinery, professional services, and road and rail. The sector tends to be cyclical, with strong surges during economic recovery. We have exposure to cyclical holdings to take advantage of economic recovery, but we also hold positions in more stalwart areas that allow steady and measured returns to provide a more balanced risk exposure.

  • We added a position in Korn Ferry, a company formerly focused on executive search, which has since diversified its business to include higher-value, more stable human capital management products and recruitment process outsourcing. Korn Ferry is led by a quality management team with a track record of successful capital allocation.
  • We increased the portfolio's position in Upwork, the largest global online marketplace for freelancers. We believe this is a best-in-class company and a beneficiary of the accelerating adoption of freelance labor in the business world.
  • We exited TransUnion following solid share price appreciation to fund other ideas in professional services, an industry that trailed the broader sector but offers many attractive opportunities, in our opinion.

Health Care

In health care, we have a sizable allocation to equipment and supplies, providers and services, and biotechnology names. The health care segment has been a sector of controversy over recent years amid reform legislation, attempts at repeal, and the uncertainty regarding its outcomes. We have focused on investments that we feel will benefit from the environment regardless of the end result by sticking to fundamentals and a diversified approach within biotechnology to mitigate risk.

  • We added to our position in Quidel, a manufacturer of diagnostic health care products and rapid diagnostic testing products, on recent share price weakness. We believe the company has a strong pipeline that has only been enhanced by its COVID-19 diagnostics tests and maintain a favorable view.
  • Shares of biopharmaceutical company Myokardia spiked on the announcement that the company would be acquired by Bristol-Myers Squibb at a significant premium and we exited our position.

Utilities

Utilities represents a smaller sector exposure but an overweight relative to the benchmark, and two of the larger trades within the period involved utilities holdings. Within the sector, we have assembled a diverse mix of regulated utilities. We favor utilities as a means of gaining bond proxy-type exposure.

  • We added a position in IdaCorp, a holding company whose principal subsidiary is regulated electric utility Idaho Power Company. We like the company's long-term record of consistent earnings growth with a focus on cost management and maintaining a strong balance sheet.
  • PNM Resources is a utility serving New Mexico and parts of Texas. Shares jumped on the news that the company would be acquired by Avangrid, the U.S. unit of Spanish renewable energy group Iberdrola, and we eliminated our position.

Sectors

Total
Sectors
11
Largest Sector Industrials & Business Services 25.10% Was (28-Feb-2021) 24.03%
Other View complete Sector Diversification

Monthly Data as of 31-Mar-2021

Indicative Benchmark: Russell 2500 Index

Top Contributor^

Financials
Net Contribution 0.23%
Sector
-0.12%
Selection 0.35%

Top Detractor^

Health Care
Net Contribution -0.91%
Sector
0.26%
Selection
-1.17%

^Relative

Quarterly Data as of 31-Mar-2021

Largest Overweight

Industrials & Business Services
By8.76%
Fund 25.10%
Indicative Benchmark 16.34%

Largest Underweight

Consumer Discretionary
By-4.51%
Fund 9.31%
Indicative Benchmark 13.82%

Monthly Data as of 31-Mar-2021

31-Mar-2021 - Curt Organt, Portfolio Manager ,
Industrials and business services, IT, health care, and financials remain the dominant sectors in the portfolio, each with greater than 10% of the equity allocation. We continue to invest in select companies across various industries where we feel valuations may underestimate the sustainability of growth or turnaround potential. During the month, this included boosting our positions within internet and direct marketing retail, health care technology, equity real estate investment trusts, and software.

Team (As of 16-Apr-2021)

Curt J. Organt, CFA

Curt Organt is the portfolio manager of the US Smaller Companies Equity Strategy and an associate portfolio manager of the US Small-Cap Core Equity Strategy in the U.S. Equity Division. Curt is a vice president and an Investment Advisory Committee member of the US Small-Cap Core Equity, US Diversified Small-Cap Value Equity, and US Small-Cap Growth Equity Strategies. He also is a vice president of T. Rowe Price Group, Inc.

Curt’s investment experience began in 1993, and he has been with T. Rowe Price since 1995, beginning in the U.S. Equity Division. Prior to this, Curt was employed by DAP Products, Inc., as a financial and marketing analyst. 

Curt earned a B.S. in finance and philosophy from LaSalle University and an M.B.A. from Wake Forest University. Curt also has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Fund manager
    since
    2019
  • Years at
    T. Rowe Price
    25
  • Years investment
    experience
    29
Eric Papesh, CFA, BA, MBA

Eric Papesh is a portfolio specialist based in London in the U.S. Equity Division. Eric supports the US Smaller Companies Equity and US Large-Cap Equity Income Strategies offered in the Europe, Middle East, and Africa and Asia-Pacific regions. Eric is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Eric’s investment experience began in 1994, and he has been with T. Rowe Price since 2014, beginning in the ISG division as a portfolio specialist. Prior to this, Eric was employed by Russell Investments where he focused on U.S. equity investment strategies.

Eric earned a B.A. in business administration, with concentrations in finance and information systems, and an M.B.A. in business administration from the University of Washington. Eric has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    26

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 UK Tax Reporting Status
Class A $1,000 $100 $100 5.00% 160 basis points 1.68% Yes
Class I $2,500,000 $100,000 $0 0.00% 95 basis points 0.99% Yes
Class Q $1,000 $100 $100 0.00% 95 basis points 1.04% Yes
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.04% No

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

T. Rowe Price Funds SICAV and its sub-funds are domiciled in Luxembourg and therefore considered offshore funds for UK tax purposes. Selected share classes of T. Rowe Price Funds SICAV have been designated “Reporting Funds” by HM Revenue & Customs (HMRC) under the guidelines of the UK Offshore Funds Regulation. These share classes report all relevant tax information to HMRC on an annual basis. Details on the information reported are outlined in the SICAV Shareholder Tax Reporting document that is available in the Fund Range Docs drop-down. Investors in “Reporting Fund” share classes who are considered United Kingdom residents for tax purposes will have any accrued gains treated as a capital gain rather than income upon sale or other disposal of their shares.