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European Equity Fund

Style agnostic, focus on quality to maintain a balanced portfolio.

ISIN LU1475745334 Bloomberg TRPEEIU:LX

3YR Return Annualised
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Total Assets


1YR Return
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Manager Tenure


Inception Date 20-Feb-2017

Performance figures calculated in USD

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29-Feb-2020 - Dean Tenerelli, Portfolio Manager,
The equity market correction is long overdue as valuations were generally unattractive. Although Europe did not look as expensive as other regions, we believe the pronounced market reaction here is rational given the moves elsewhere. The situation remains fluid, with considerable uncertainty as to how the pandemic and associated economic environment will develop. Even so, we welcome market volatility and the dispersion of returns because it creates relative value opportunities that we can exploit.
Dean Tenerelli
Dean Tenerelli, Portfolio Manager

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

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Manager's Outlook

European equities rallied strongly to fresh peaks in 2019, although the gains masked bouts of shifting sentiment and direction caused by uncertainty surrounding trade, economic fundamentals, and central bank intentions. Stocks may struggle to advance further and markets may remain volatile without further resolution of issues that lie at the root of this uncertainty.

The market is less gloomy now after greater clarity on Brexit following a convincing election victory for Conservative Prime Minister Boris Johnson, a limited trade accord between the U.S. and China, and central bank action not only in Europe but also in the U.S., China, and Japan to continue easy monetary policy over the medium term.

A sharper-than-expected economic slowdown in Europe appears to be stabilizing. Expansionary fiscal policies are expected to make a positive contribution to economic activity in the coming years. Low real interest rates should support growth. If the uncertainty relating to trade conflicts and the UK's exit from the European Union (EU) lessens, investment and export growth should pick up.

Company earnings are also forecast to pick up this year. Valuations are around their historical averages, and our conservative valuation approach is challenged to find many higher-quality opportunities that appear to offer meaningful absolute upside to current levels.

However, investor concerns still include the economy, but also specific countries, such as China and Germany; trade frictions, especially those affecting the automotive industry; political instability in Italy and its strained relationship with the EU; and lingering nervousness about a no-deal Brexit should the UK and the EU fail to agree to a trade deal by the end of 2020.

Nevertheless, we welcome volatility and dispersion of returns because it creates relative value opportunities that we can exploit. We remain positive about the performance potential of our holdings and their longer-term prospects.

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 diversified portfolio of stocks of European companies.

Investment Approach

  • Fundamental research is critical to successfully identify and assess long-term investment opportunities. We look for companies with high returns on capital and capable of providing sustainable earnings across the market cycle.
  • Style agnostic, focus on quality. By avoiding style constraints, we can invest in quality companies and maintain a balanced portfolio through market cycles.
  • Disciplined approach to valuation. We aim to buy businesses at a clear discount to their intrinsic value.
  • Risk management is essential and is assisted by diversification, quantitative analysis, and automatic stabilizers built into our investment process.

Portfolio Construction

  • Typically 50-80 stocks
  • Individual position size up to 4.0% relative to the indicative benchmark
  • Sector ranges: typically +/- 10% relative to the indicative benchmark
  • Country ranges: typically +/- 10% relative to the indicative benchmark
  • Expected Tracking Error: typically 3.0% to 6.0%
  • Information Ratio objective: >0.5
  • Cash target range: fully invested, typically less than 5.0%
  • Turnover range: 40%-100%

Performance (Class I | USD)

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Fund % 2.46% 6.54% N/A 6.42%
Indicative Benchmark % -0.64% 4.23% N/A 4.17%
Excess Return % 3.10% 2.31% N/A 2.25%

Inception Date 20-Feb-2017

Indicative Benchmark: MSCI Europe Index Net

Data as of  29-Feb-2020

Performance figures calculated in USD

  1 YR 3 YR
5 YR
Since Inception
Fund % 27.02% N/A N/A 11.03%
Indicative Benchmark % 23.77% N/A N/A 8.99%
Excess Return % 3.25% N/A N/A 2.04%

Inception Date 20-Feb-2017

Indicative Benchmark: MSCI Europe Index Net

Data as of  31-Dec-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 03-Apr-2020 Quarter to DateData as of 03-Apr-2020 Year to DateData as of 03-Apr-2020 1 MonthData as of 29-Feb-2020 3 MonthsData as of 29-Feb-2020
Fund % -2.84% -2.84% -24.02% -8.97% -7.30%
Indicative Benchmark % -4.84% -4.84% -27.99% -9.28% -8.10%
Excess Return % 2.00% 2.00% 3.97% 0.31% 0.80%

Inception Date 20-Feb-2017

Indicative Benchmark: MSCI Europe Index Net

Indicative Benchmark: MSCI Europe Index Net

Performance figures calculated in USD

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.

Returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 July 2018, 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. 

29-Feb-2020 - Dean Tenerelli, Portfolio Manager,
The MSCI Europe Index rebounded to a record high in February before suffering a correction on concerns that the worsening coronavirus outbreak would tip the global economy into a recession. At the portfolio level, the top-contributing sectors for the portfolio were industrials and business services, materials, and financials, due to stock picking. Information technology (IT) had the most negative impact, mainly due to sector allocation; real estate was neutral. In industrials and business services, shares of Italy-based Prysmian, a leading cable manufacturer, climbed higher until mid-February, after which the market retreat eroded gains. Separately, Prysmian is being supported by expectations that the company seems well-positioned as the industry leader to exploit the growth opportunity presented by an imminent expansion in offshore wind farms across the globe. On the negative side, within IT, our holding in Capgemini, a leading global management consulting, outsourcing and professional services company, weighed on returns. The shares suffered as IT stocks sold off on Apple’s profit warning. The company also posted slightly disappointing results for financial year 2019 that showed organic growth and operating income were below expectations.


Largest Holding Roche Holding 3.98% Was (30-Sep-2019) 3.92%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 28.77% View Top 10 Holdings Monthly data as of 29-Feb-2020

Largest Top Contributor^

Roche Holding
By 1.61%
% of fund 3.96%

Largest Top Detractor^

By -2.41%
% of fund 3.90%


Quarterly Data as of 31-Dec-2019

Top Purchase

Cia De Distribucion Integral Logista (N)
Was (30-Sep-2019) 0.00%

Top Sale

Experian (E)
Was (30-Sep-2019) 1.82%

Quarterly Data as of 31-Dec-2019

31-Dec-2018 - Dean Tenerelli, Portfolio Manager,

Attractively Valued Stocks Emerged as Market Retrenched

Attractive opportunities have emerged in the equity market retrenchment at the end of 2018. These conditions suit our investment approach as they allow us to buy strong high-quality businesses and to diversify the portfolio. We increased our positions most in defensive sectors, such as utilities and real estate, and reduced them in the more cyclical sectors. However, the decline in cyclicals did not deter us from assessing high-quality opportunities with durable earnings that emerged there. On balance, we are tending to find more attractive opportunities in companies that have a more defensive profile or where we believe the market misunderstands the fundamental outlook and unfairly penalizes the company. At the same time, we continue to seek a relatively balanced portfolio in terms of exposures to possible economic scenarios, so that our relative performance is not dependent on a particular "macro" environment.

We altered our positioning by:

  • Raising our exposure to utilities, now our largest overweight, initiating in Iberdrola
  • Moving to an overweight in real estate, adding Great Portland Estates
  • Reducing our underweight in materials, investing in Koningklijke DSM
  • Slimming our overweight in industrials and business services

Raised Exposure to Utilities, Now Biggest Overweight

We increased our exposure to utilities, which is now our biggest overweight. We are overweight in the gas and multi-utilities industries, where we hold Italian names Italgas, a natural gas distribution company, and Hera, a public utility company. We also hold Red Electrica, a partly state-owned and public limited Spanish corporation that operates Spain's national electricity grid.

  • We initiated an investment in Iberdrola, a Spain-based integrated utility company, taking advantage of weakness in the share price, which is driven by regulatory uncertainty. The company is attractively valued, provides a steady income stream, and should benefit over the longer term from its position in the decarbonized renewables and electricity transmission markets. It also has a potential pipeline of new assets extending beyond 2025.

Moved to Overweight in Real Estate

As we seek to maintain a balanced portfolio to counter the impact of market volatility, we raised our exposure to the real estate sector by adding UK office developer Great Portland Estates (GPOR). Our other investment is in Aedas Homes, a Spanish house builder with a large land bank.

  • We believe GPOR, which operates in central London, is undervalued by the market. The management team has an excellent track record, the balance sheet is strong, and the values of its office assets are being underestimated. We believe there is a high probability that GPOR will return capital to shareholders after a successful disposals program.

Reduced Underweight in Materials

We increased our allocation to materials, a sector that we have not favored largely because we did not like the business models of many companies within it. However, when opportunities to own high-quality companies arise, such as in the current market retrenchment, we are happy to invest in them. To this end, we opened a position in Koningklijke DSM, a leading vitamin maker and performance materials business.

We currently own France-based Air Liquide, a large international industrial gas company; Corbion, a Dutch biobased ingredients company operating in the food and biochemical sectors; and Johnson Matthey, a specialty chemicals company that is also the world's biggest auto catalyst maker.

  • We took advantage of share price weakness to invest in DSM. We believe the business is becoming more stable and focused on growth, thanks to the acquisition-driven transformation program. In our view, improving organic growth, an effective cost and capital efficiency program, and the end of the headwind of falling vitamin E prices should drive a share price recovery and outperformance.

Reduced Overweight in Industrials and Business Services

We reduced our overweight industrials and business services amid signs that the European economy is losing momentum, a less favorable environment for this cyclical sector.

We continued to adjust the composition of our holdings, taking advantage of the market decline to sell companies that have underperformed and invest in high-quality businesses with strong industry positions and durable earnings that are now more realistically valued.

We sold out of CNH Industrial, one of the world's largest capital good companies; Trelleborg, a Sweden-based engineering company that develops polymer sealing solutions and wheel systems; and Wolters Kluwer, a Dutch print and digital publisher, after a strong run.

In terms of industry, our largest weight is still professional services companies. We own Bureau Veritas, a France-based international certification agency, and Experian, the leading global provider of credit information with operations in 17 countries, and we swapped Wolters Kluwer for RELX, the world's leading publisher of science journals and a provider of risk assessments on transactions with retail customers. Electrical equipment and aerospace and defense are also overweights. In the former, our biggest position is Schneider Electric, a global specialist in energy management and automation. In the latter, we also hold Dassault Aviation, another French company.

  • We started investing in RELX because we believe the market underestimates the quality and sustainability of growth at the risk business, which provides one of the leading online identity verification tools. It should benefit from the recent acquisition of the ThreatMetrix, one of the leading electronic devices databases. We also believe the risks around the science publishing business are overdone.
  • We sold our position in CNH Industrial because slowing economic momentum and increasing uncertainty in the agricultural sector about the possible impact of tariffs and trade disruptions could further curb sales growth in the main divisions. We exited Trelleborg as signs of weakening demand and emerging risks in the automotive agricultural and industrials segments could, in our view, weigh further on the share price after a period of underperformance.

Maintained Health Care Overweight; Exited Fresenius

We have retained our overweight allocation to the health care sector amid the market uncertainty, which favors defensive sectors. We sold Fresenius, a provider of health care-related products and services, and sister company Fresenius Medical Care after both companies issued a second surprise profit warning in the space of two months. Neither company now expects net income growth in 2019.

We hold sizable positions in pharmaceuticals, with overweights in two Swiss companies, Roche Holding and Novartis, a manufacturer of health care and nutritional products. We also hold Getinge, an off-benchmark Swedish medical technology company with product areas such as surgery, intensive care, infection control, and patient handling.


Largest Sector Industrials & Business Services 18.17% Was (31-Jan-2020) 16.62%
Other View complete Sector Diversification

Monthly Data as of 29-Feb-2020

Indicative Benchmark: MSCI Europe Index

Top Contributor^

Communication Services
Net Contribution 0.68%
Selection 0.68%

Top Detractor^

Consumer Discretionary
Net Contribution -0.39%


Quarterly Data as of 31-Dec-2019

Largest Overweight

Industrials & Business Services
Fund 18.17%
Indicative Benchmark 13.75%

Largest Underweight

Consumer Staples
Fund 5.24%
Indicative Benchmark 14.11%

Monthly Data as of 29-Feb-2020

29-Feb-2020 - Dean Tenerelli, Portfolio Manager,
Sector positioning was again largely a function of bottom-up stock picking decisions. There were no meaningful changes to the portfolio, but opportunities are starting to emerge and continued market weakness in the next few weeks may well prompt some movement in positions. We raised our overweight allocation to industrials and business services, now our largest weight. We opened a position in a Finland-based provider of services and equipment to the paper, board and pulp industry. We reduced our overweight exposure to health care, paring our investment in a Swiss pharmaceutical company that has performed well over the past year.


Largest Country France 17.44% Was (31-Jan-2020) 17.30%
Other View complete Country Diversification

Monthly Data as of 29-Feb-2020

Indicative Benchmark: MSCI Europe Index

Top Contributor^

United Kingdom
Net Contribution 0.60%
Selection 0.71%

Top Detractor^

Net Contribution -0.45%


Quarterly Data as of 31-Dec-2019

Largest Overweight

Fund 9.99%
Indicative Benchmark 3.77%

Largest Underweight

United Kingdom
Fund 16.12%
Indicative Benchmark 24.72%

Monthly Data as of 29-Feb-2020

30-Sep-2018 - Dean Tenerelli, Portfolio Manager,
The new position in the aforesaid Belgian bank reduced our underweight allocation to the country. Otherwise, our country weights were little changed. Our country positioning is a function of our bottom-up stock picking.

Team (As of 31-Mar-2020)

Dean Tenerelli

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Tenerelli has 28 years of investment experience, 19 of which have been at T. Rowe Price. He joined the firm in 2000 as an equity research analyst and was appointed co-manager of the firm's Global Equity Strategy in 2004. Prior to joining T. Rowe Price, Mr. Tenerelli served as a director for Credit Suisse Asset Management, where he was a senior telecommunications analyst. Prior to Credit Suisse Asset Management, Mr. Tenerelli worked as assistant portfolio manager at Artisan Partners (1995-2000). He began his investment career in 1993 at Banesto Bolsa in Madrid as an equity analyst following Spanish equities. Mr. Tenerelli later became an international equity analyst, focused on Europe, for Waddell and Reed in Kansas City, MO. In 1995, he moved to Artisan Partners as an assistant portfolio manager.

A graduate of Rutgers University with a B.A. in economics, Mr. Tenerelli earned an M.B.A. from Escuela Superior de Administracion y Direccion de Empresa and an M.A. in international management from American Graduate School of International Management (Thunderbird).

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Andrew Clifton

Andrew Clifton is a portfolio specialist in the Equity Division at T. Rowe Price. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Clifton has over 30 years of investment experience, nine of which have been at T. Rowe Price. Prior to joining the firm in 2010, he was an executive director at UBS Global Asset Management. Prior to that, he was a vice president at Merrill Lynch.

Mr. Clifton earned a B.Sc. in economics from the London School of Economics and an M.Sc. in econometrics from the University of Southampton.

  • Years at
    T. Rowe Price
  • Years investment

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A €15,000 €100 €100 5.00% 150 basis points 1.61%
Class I €2,500,000 €100,000 €0 0.00% 65 basis points 0.73%
Class Q €15,000 €100 €100 0.00% 65 basis points 0.78%

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

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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

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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