T. Rowe Price Funds SICAV
Euro Corporate Bond Fund
An all-weather approach for changing markets.
Key features
Consistent Outperformance
The Euro Corporate Bond Fund aims to deliver regular and diversified outperformance in different market environments.
Downside Risk Management
Our disciplined risk management process is designed to manage downside risk, particularly in periods of widening credit spreads.
High Liquidity Profile
We focus on high quality securities with the best liquidity characteristics. Our portfolio construction is also based on optimal diversification to avoid concentration risk.
The fund is actively managed diversified fund invests predominantly in corporate bonds denominated in euros. Environmental, Social and Governance (ESG) considerations are integrated into the investment process as a component of the investment decision. The fund is categorised as Article 8 under Sustainable Finance Disclosure Regulation (SFDR).
When investing in funds, certain risks apply, including those specific to investing in Credit, Derivative, Hedging and Interest rate. For a full list of risks applicable to this fund, please refer to the prospectus.
Strategy overview
Today’s market backdrop remains challenging, with persistent inflation, policy uncertainty, and more frequent volatility.
The T. Rowe Price Euro Corporate Bond strategy follows an actively managed, all-weather approach that aims to generate consistent alpha in different market environments by holding a diversified portfolio of investment grade corporate issues across a variety of sectors and rating profiles; with a consideration for focus on limiting downside risk at times when credit markets are underperforming due to widening of credit spreads. Our intensive proprietary fundamental research is key to identifying the best-performing issuers and avoiding those with poor management or deteriorating creditworthiness.
Hi, I'm Howard Woodward, portfolio manager of the T. Rowe Price Euro Corporate Bond Fund.I've been investing in fixed income markets for over twenty-five years.I have two strong passions in my life aside from my family: rugby and investing.These passions, to my mind, share surprising parallels.To achieve success in both requires a clear game plan, a plan that's agile and adaptable in the face of the opposition or market conditions.And with both, disciplined execution within that game plan can reap rewards.
With rugby and investing, the players on the field, those in your team, are the talent or the squad that you can leverage, the team at your disposal as a portfolio manager.Understanding the squad, understanding the team, is of paramount importance.And having spent the first eighteen years of my career as an analyst at T. Rowe Price, I have a deep appreciation for the analytical rigor of the credit research structure and the analysts that support the investment process.
My team, however, is not drawn from fifteen players, but from over fifty analysts who contribute directly and indirectly to the fund.Each analyst is a specialist in their field, bringing unique insights that identify opportunities to generate alpha for the portfolio.My role is to construct a portfolio that blends the high-conviction investment ideas from our research team within defined risk limits.Complementing this, our macro team provide a top-down perspective, helping us understand the broader risk environment.
In rugby, a coach picks the best team suited to the weather, the pitch, the opposition, to deliver the best performance.In portfolio management, we must also adapt, blending tactical ideas with core positions and defensive offsets, depending on the market environment.We aim to outperform in all conditions, whether spreads tighten or widen.For example, in 2022, when markets reacted to the invasion of Ukraine, we shifted to a more defensive stance to protect the portfolio to the downside, while still capturing opportunities to outperform.Ultimately, my goal is simple: to build a portfolio that functions like a high-performing rugby team, be resilient, adaptable, and consistently deliver strong results, no matter what the conditions throw at us.That's why I'm proud that the Euro Corporate Bond Fund has delivered top-quartile and even top-decile performance over most short and long periods.
Key takeaways
- Powered by deep credit research.
- Built to adapt across market conditions.
- A strong and consistent track record.
Euro Corporate Bond Fund
ISIN: LU0133091248 (Class I)
| Inception date | February 2002 |
| No of issuers | 100-200 |
| Portfolio Manager | Howard Woodward |
| Benchmark | Bloomberg Euro-Aggregate: Corporates Bond Index EUR |
| Bloomberg | TRPECBI LX |
The euro credit market is very large and diverse with over 3,500 issues in the Bloomberg Euro-Aggregate: Corporates Bond Index. It takes a team with the skill, patience, and dedication to unearth the best opportunities for the portfolio. Astute security selection and rigorous risk management are key in delivering a truly all-weather portfolio.
Why T. Rowe Price for fixed income?
Independent in thought, disciplined in action.
T. Rowe Price fixed income experts rely on active questioning, independent thinking, and a disciplined approach to find opportunities with the potential to deliver better client outcomes.
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Risks – the following risks are materially relevant to the fund (refer to prospectus for further details):
Credit - Credit risk arises when an issuer's financial health deteriorates and/or it fails to fulfill its financial obligations to the fund.
Derivatives - Derivatives may be used to create leverage which could expose the fund to higher volatility and/or losses that are significantly greater than the cost of the derivative.
Hedging - Hedging measures involve costs and may work imperfectly, may not be feasible at times, or may fail completely.
Interest rate - Interest rate risk is the potential for losses in fixed-income investments as a result of unexpected changes in interest rates.
Geographic concentration - Geographic concentration risk may result in performance being more strongly affected by any social, political, economic, environmental or market conditions affecting those countries or regions in which the fund's assets are concentrated.
Sector concentration - Sector concentration risk may result in performance being more strongly affected by any business, industry, economic, financial or market conditions affecting a particular sector in which the fund's assets are concentrated.
Default - Default risk may occur if the issuers of certain bonds become unable or unwilling to make payments on their bonds.
High yield bond - High yield debt securities are generally subject to greater risk of issuer debt restructuring or default, higher liquidity risk and greater sensitivity to market conditions.
Security liquidity - Any security could become hard to value or to sell at a desired time and price.
Contingent convertible bonds - Contingent Convertible Bonds may be subject to additional risks linked to: capital structure inversion, trigger levels, coupon cancellations, call extensions, yield/valuation, conversions, write downs, industry concentration and liquidity, among others.
Total return swap - Total return swap contracts may expose the fund to additional risks, including market, counterparty and operational risks as well as risks linked to the use of collateral arrangements.
Sustainability Alignment Product - Funds with a sustainable investment objective, or those that seek to promote environmental and/or social characteristics, are subject to distinct risks and considerations compared to conventional investment products. These funds may perform differently from those without such objectives or characteristics
General Fund Risk – the following risks are materially relevant to the fund (refer to prospectus for further details):
Conflict of interest - The investment manager's obligations to a fund may potentially conflict with its obligations to other investment portfolios it manages.
Counterparty - Counterparty risk may materialise if an entity with which the fund does business becomes unwilling or unable to meet its obligations to the fund.
Custody - In the event that the depositary and/or custodian becomes insolvent or otherwise fails, there may be a risk of loss or delay in return of certain fund's assets.
Cybersecurity - The fund may be subject to operational and information security risks resulting from breaches in cybersecurity of the digital information systems of the fund or its third-party service providers.
Investment fund - Investing in funds involves certain risks an investor would not face if investing in markets directly.
Inflation - Inflation may erode the value of the fund and its investments in real terms.
Market - Market risk may subject the fund to experience losses caused by unexpected changes in a wide variety of factors.
Market liquidity - In extreme market conditions it may be difficult to sell the fund's securities and it may not be possible to redeem shares at short notice.
Operational - Operational risk may cause losses as a result of incidents caused by people, systems, and/or processes.
Sustainability - An environmental, social or governance event or condition that, if it occurs could cause an actual or a potential material negative impact on the value of the investment and performance of the fund.
Important Information
This marketing communication is for investment professionals only. Not for retail distribution.
The Funds are sub-funds of the T. Rowe Price Funds SICAV, a Luxembourg investment company with variable capital which is registered with Commission de Surveillance du Secteur Financier and which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). Full details of the objectives, investment policies, risks and sustainability information are located in the prospectus which is available with the key investor information documents (KIID) and/or key information document (KID) in English and in an official language of the jurisdictions in which the Funds are registered for public sale, together with the articles of incorporation and the annual and semi-annual reports (together “Fund Documents”). Any decision to invest should be made on the basis of the Fund Documents which are available free of charge from the local representative, local information/paying agent or from authorised distributors. They can also be found along with a summary of investor rights in English at www.funds.troweprice.com . The Management Company reserves the right to terminate marketing arrangements. For UK investors: T. Rowe Price Funds SICAV is not authorised in the United Kingdom but overseas. The UK Financial Ombudsman Service is unlikely to consider complaints related to the scheme, its operator or its depositary. Any claims for losses relating to the operator and the depositary of the scheme are unlikely to be covered by the UK Financial Services Compensation Scheme. The funds are not subject to the UK Sustainability Disclosure Requirements (SDR).
EEA—This material is issued and approved by T. Rowe Price (Luxembourg) Management S.à r.l. 35 Boulevard du Prince Henri L-1724 Luxembourg which is authorised and regulated by the Luxembourg Commission de Surveillance du Secteur Financier. For Professional Clients only.
Switzerland—Issued in Switzerland by T. Rowe Price (Switzerland) GmbH, Talstrasse 65, 6th Floor, 8001 Zurich, Switzerland. For Qualified Investors only.
UK—This material is issued and approved by T. Rowe Price International Ltd, Warwick Court, 5 Paternoster Square, London EC4M 7DX which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.
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