China Growth Leaders Equity Fund

Capital at 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.

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Overview

Manager's Outlook

We are positive on the outlook for Chinese equities in 2021 for three key reasons. First, China is expected to lead the recovery of Asia Pacific economies thanks to successful early control of the virus as many nations still struggle to emerge from the pandemic. Vaccine rollouts as well as the promotion of vaccine passports will likely accelerate the reopening of borders, providing a strong case for a pickup in economic activities. Second, the World Bank forecasts China's economy to expand by more than 8% in 2021, compared with 2.3% in the previous year, implying rapid expansion from multiple growth engines Third, despite being the world's second-largest economy, Chinese equities are still underrepresented in global indices. The equity market is poised to gain as the index weightings gradually normalize.

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In our view, China has done enough to successfully reflate its own economy. One consequence of China's early recovery is that expectations of fresh stimulus have been dampened. At the same time, there is no sign that the government will tighten policy prematurely. Rather, it appears to be taking a "wait and see" approach that could prevail for the next couple of quarters.

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The durability of the recovery in 2021 will require a shift in the sources of growth toward the consumer, including those consumer services that suffered most from the pandemic. The prospects for consumer demand look good: Auto sales, a key gauge of consumer confidence, ended last year above 2019 levels. Successive holidays and consumer festivals saw improving consumer confidence and pent-up demand. Residential property has rebounded, supported by a recovery in household income.

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The positive fundamental outlook for Chinese equities in 2021 is even more attractive in relative terms given the still uncertain outlook for many other economies, both developed and emerging. We expect the consumer to play a bigger role in driving China's economic growth next year.

Strategy

Fund Summary

We go across the market cap spectrum to identify companies with competitive edge in innovative technologies and high quality management teams that have a strong track record of execution and shareholder inclusiveness. We take a bottom-up approach seeking to invest in stocks with high quality free cash flow growth that can offer sustainable and growing return on capital. The manager is not constrained by the fund's benchmark, which is used for performance comparison purposes only.

Asia Pacific Excluding Japan

Team

Jacqueline Liu,
Portfolio Manager

Jacqueline (Jackie) Liu is a regional portfolio manager in the Equity Division of T. Rowe Price International Investment. She manages the China Growth Leaders Strategy. She is also a research analyst covering Asia internet sector for both public and private market investments.

Portfolio Manager since

2021

Years at T. Rowe Price

Years investment experience

Charles Knudsen,
Portfolio Specialist

Chuck Knudsen is a portfolio specialist in the Equity Division of T. Rowe Price.

Years at
T. Rowe Price

Years investment experience

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.

Past performance is not a reliable indicator of future performance.

Source for 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.

Daily performance data is based on the latest available NAV.

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 and risks are located in the prospectus which is available with the key investor information documents 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.troweprice.com. The Management Company reserves the right to terminate marketing arrangements.

Please note that the Fund typically has a risk of high volatility.

The specific securities identified and described in this website do not represent all of the securities purchased, sold, or recommended for the sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.

A full list of the currently issued Share Classes including Distributing, Hedged, and Accumulating Categories may be obtained, free of charge and upon request, from the registered office of the Company.

Risks

Typical Investor

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