Global Equity (Hedged) Fund

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Overview

Manager's Outlook

Equity markets continued to build on their strong returns from the first half of the year. Year to date, equities are up more than many expected and the key drivers we discussed last quarter, including corporate earnings, low interest rates, and China, have led stocks broadly higher. Disruption also continues to be a significant trend in a number of industries and markets, resulting in disparate outcomes with clear winners and losers, which benefits good stock pickers.

Looking forward, we think U.S. economic policy delivery will be a key market determinant. With three failed efforts to repeal and replace the Affordable Care Act, tax reform and infrastructure spending take center stage.

We remain optimistic that President Trump and the Republicans will be able to push through on at least one of those fronts, which would be a positive indicator for the market in advance of the U.S. midterm elections. If substantive tax reform and infrastructure spending both come to fruition, we envision markets heading materially higher with sentiment of both individuals and corporations being lifted. Conversely, if no progress is made on either initiative, we would expect a more muted or negative market response as the Trump administration's ability to legislate would be further questioned.

Elsewhere, Japan has lagged the rest of the world and offers better relative valuation. While we still have concerns about corporate governance and domestic growth, we are finding more opportunities in Japan than we have in some time. European growth continues to improve, supported by increasing business investment, stronger loan growth, declining unemployment, and stronger global trade, but the overhangs of Brexit and geopolitical issues in Spain, Italy, Greece, and Germany make investing in the region more complicated.

Within emerging markets, India, Indonesia, the Philippines, and Peru remain our favored markets from a pure economic story. These countries have strong long-term growth prospects driven by domestic consumption trends, as well as favorable demographics that can spur ongoing growth in what remains a low to moderate growth world. This should provide an economic and earnings advantage over the long term, an advantage that we do not believe equity markets have priced in today.

We have significant exposure to China due to our Internet holdings, but recently established trading links connecting the Shanghai, Shenzhen, and Hong Kong stock markets have greatly expanded our investable universe in the country. With the China A-share market more liquid and tradeable, we have more direct access to other businesses with powerful growth prospects, such as health care, where the government is keen to support domestic companies and innovations instead of Western ones. While we have increased our Chinese exposure, we are still avoiding banks, state-owned enterprises, and property developers.

Overall, we remain constructive that there are enough drivers in place to maintain and elevate markets levels. Absent an inherently unpredictable crisis, the fundamental backdrop is reasonably solid when considering the potential for global equities to hold their ground or deliver additional, albeit more modest, returns. While macro uncertainty will remain part of any environment, stocks are driven by valuations, changes in earnings power, and cash flow generation over the longer term. Our focus remains on investing in durable businesses that have advantaged long-term growth prospects, and we believe that buying these stocks at favorable valuations can create real value for our clients over time.

Strategy

Fund Summary

High-conviction, global equity portfolio targeting companies with above-average, sustainable growth characteristics. Currency hedged (to AUD) to reduce foreign currency-related fluctuations.

OUR VIEWS ON GLOBAL EQUITIES

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

The Management Fee for the T. Rowe Price Global Equity (Hedged) Fund- I Class is 0.87% p.a. and the Indirect Cost is 0.00% p.a. Full details of other fees and charges are available within the Fund's Product Disclosure Statement and Reference Guide.

Benchmark Data Source: MSCI. MSCI index returns are shown with reinvestment of dividends after the deduction of withholding taxes. MSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

The specific securities identified and described in this website do not represent all of the securities purchased or sold for this fund. This information is not intended to be a recommendation to take any particular investment action and is subject to change. No assumption should be made that the securities identified were or will be profitable.

Unless otherwise specified, all fund ratings, awards and data are as of 30-Nov-2024 and sourced from T. Rowe Price.

Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298 AFSL 240975) is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Stock Exchange (ASX:EQT). Equity Trustees and T. Rowe Price Australia Limited ("TRPAU") (ABN: 13 620 668 895 and AFSL: 503741) are, respectively, the responsible entity and investment manager of the T. Rowe Price Australian Unit Trusts. A Target Market Determination for each T. Rowe Price Australian Unit Trust (or class of units in a Trust) is available here (http://www.eqt.com.au/insto). It describes who the financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where Equity Trustees Limited, the responsible entity of the T. Rowe Price Australian Unit Trusts may need to review the Target Market Determination for the financial product.

For Wholesale Clients only.

Past performance is not a reliable indicator of future performance. The price of any fund may go up or down. Investment involves risk including a possible loss to the principal amount invested. For general information purposes only, does not take into account the investment objectives, financial situation or needs of any particular investor. For further details, please refer to each fund's product disclosure statement and reference guide which are available from Equity Trustees (www.eqt.com.au/insto) or TRPAU (www.troweprice.com.au).

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

Risks

Typical Investor