T. Rowe Price Global Equity Fund

What are the advantages of the global growth equity strategy?

I think really four things.

I mean, the first one is it truly is the wholeworld in a single portfolio, and that's rarer than it sounds out there. The majority of global managers today are invested in about fifteen countries. We're in more like thirty.

The second thing is that it really is leveraging this incredible world-class research platform. It's not a small boutique of people having a global equity. It's reflecting the very best thinking of one of the deepest, most talented investment firms in the world.

The third thing is it has that durable quality growth focus. And what I like about that, it means the assets we own in general are ones where time is our friend, where with every passing year, their earnings are higher, their cash flows are higher, and we would expect them on average to be worth a bit more.

And then the last thing is that portfolio construction is done in a way that is diversified, not just across countries, but across sectors.

So we're trying to be also thoughtfully aware of things we don't know and uncertainties that are just very difficult to play out and really focus on the stock picking of the best companies within every sector and across all those countries so that we're not too beholden to any one or two big things that could go wrong.

What characteristics are you looking for when investing in a stock?

We try and fill the portfolio with durable quality growth companies and that sounds like a lot of jargon, but simplistically, the four things I really look for is, as, as we're looking at companies to put in the portfolio.

Firstly, companies that play in an attractive industry, what I call a fertile industry, where there's a large and growing market and a large and growing profit pool for all the industry participants.

Secondly, companies that are really special, that have a true competitive advantage within that fertile industry. Companies that are taking market share overtime that leads to so many other benefits of, natural scale leverage, attracting better people, retaining better people, lower cost of capital over time.

Thirdly, I want a management team that I really trust, and particularly that I trust on capital allocation.

I think for growth investing, one of the most important things is companies that have the ability to reinvest meaningful cash at good returns over time, and capital allocation is key.

And if those first three things are true, a fertile industry, a special company, and a great management, then we look at the valuation to say, "Do we think we can make forty to sixty percent over two to three years investing in this?" And that's looking at the free cash flow yields, the price earnings.

Why does active management matter?

As an active investor, what I really love is finding things where there's inefficiency, where things are hard, and where we have a real advantage.

And I think at T. Rowe Price, the fact that we have such experience for so many years and so many people in these markets, and that there is a lot of information asymmetry, that there's a lot of emotion and a lot of fear and greed that play in those markets means it's somewhere where it's great as an active manager to add alpha.