T. Rowe Price T. Rowe Price Trusty Logo

SICAV

Global Technology Equity Fund

To provide long-term capital growth by investing mainly in technology companies, and companies enabled by technology.

ISIN LU1244139827 Bloomberg TRGBTEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

14.95%
$806.4m

1YR Return
(View Total Returns)

Manager Tenure

9.20%
<1yr

Information Ratio
(3 Years)

Tracking Error
(3 Years)

-0.52
8.78%

Inception Date 15-Jun-2015

Performance figures calculated in USD

Other Literature

29-Feb-2020 - Alan Tu, Portfolio Manager ,
We believe the portfolio is well positioned, given our emphasis on high-quality companies that have the potential to compound value for shareholders. We are optimistic that long-term progress in areas such as e-commerce, cloud computing, big data, and artificial intelligence should offer meaningful upside potential for technology stocks exposed to these trends. Amid all the uncertainty created by the coronavirus outbreak, we aim to remain opportunistic as we invest intelligently and tactically in our highest-conviction ideas.
Alan Tu
Alan Tu, Portfolio Manager

Alan Tu is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is president of the Investment Advisory Committee of the Global Technology Equity Strategy. Previously, he was an investment analyst following software companies in the technology sector. Mr. Tu is a vice president and an Investment Advisory Committee member of the U.S. Small Cap Growth and Science & Technology Strategies. He is a vice president of T. Rowe Price Group, Inc. 

Click for Manager Outlook
 

Strategy

Manager's Outlook

We believe the portfolio is well positioned for 2020 and beyond, thanks to its emphasis on high-quality companies that have the potential to compound value for shareholders.

In our view, enterprise spending on cloud-based software should remain a priority in 2020, even in the event of a broader economic slowdown. The positions that we built in high-growth software companies should benefit from this secular trend. We believe their valuations appear favorable on a three-year horizon.

We recognize that the regulatory uncertainty surrounding the large U.S. internet companies could be a source of volatility and headline risk, but we are heartened that these challenges have not prompted these tech giants to slow their pace of innovation.

In semiconductors, we prefer companies with idiosyncratic growth stories while acknowledging that there could be a higher return hurdle for the more macroeconomic-sensitive names after the subsector's strong performance in 2019.

Looking ahead to 2020, we remain optimistic that long-term trends in areas such as e-commerce, cloud computing, big data, and AI should offer meaningful upside potential for tech stocks exposed to these drivers. We aim to remain opportunistic as we invest intelligently and tactically in the innovative companies that we believe are best-positioned to drive differentiated returns.

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 technology development or utilization companies, with a focus on leading global technology companies. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Seeks long-term growth by investing primarily in the common stocks of companies that generate the majority of revenues from the development, advancement, and use of technology.
  • Stock selection is driven by rigorous research and analysis of companies, sectors, and industry trends.
  • The portfolio invests primarily in the common stocks of technology companies or companies enabled by technology across the entire market capitalization spectrum. We seek companies which can successfully weather economic cycles and deliver sustainable growth through product development and innovation, at a reasonable valuation.
  • While our primary emphasis is on a company’s prospects for future growth, valuation can also be an important consideration, particularly when valuation reaches extreme levels.
  • The portfolio is less diversified than a non-focused fund and its substantial reward potential is coupled with significant risk. In addition, any foreign holdings could be affected by declining local currencies or adverse political or economic events.

Portfolio Construction

  • Typically 35-60 stock portfolio
  • Non-U.S. companies typically make up 25-45% of the portfolio
  • Portfolio consists of highest conviction ideas from a global perspective
  • Diversification across sectors, countries/currencies, and end markets is a risk management tool
  • Bottom-up stock picking is used to capitalize on rapid and extreme changes in technology trends

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 9.20% 14.95% N/A 16.22% 9.20%
Indicative Benchmark % 22.80% 19.51% N/A 16.99% 22.80%
Excess Return % -13.60% -4.56% N/A -0.77% -13.60%

Inception Date 15-Jun-2015

Manager Inception Date 28-Feb-2019

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  29-Feb-2020

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 33.05% 20.82% N/A 17.29%
Indicative Benchmark % 46.89% 25.18% N/A 18.82%
Excess Return % -13.84% -4.36% N/A -1.53%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  31-Dec-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 27-Mar-2020 Quarter to DateData as of 27-Mar-2020 Year to DateData as of 27-Mar-2020 1 MonthData as of 29-Feb-2020 3 MonthsData as of 29-Feb-2020
Fund % -7.84% -9.44% -9.44% -7.27% 0.59%
Indicative Benchmark % -11.22% -15.16% -15.16% -6.97% 0.21%
Excess Return % 3.38% 5.72% 5.72% -0.30% 0.38%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Indicative Benchmark: MSCI All Country World Index Information Technology 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 - Alan Tu, Portfolio Manager ,
Global technology shares outperformed the MSCI All Country World Index in February. Within the portfolio, our underweight position in semiconductors had a modestly negative impact. Not owning Nvidia, a leading designer of graphics processing units, was a source of weakness. The stock jumped after the company reported strong quarterly results, headlined by surging data centre revenue amid strong demand related to conversational language understanding and other artificial intelligence-related workloads. Our above-benchmark allocation to the consumer/retail subsector marginally also held back its relative performance. Magazine Luiza's stock pulled back in sympathy with the broader Brazilian equity market, which came under pressure amid concerns about the coronavirus outbreak and its effects on demand for the commodities that the country produces. In our view, Magazine Luiza boasts one of the leading e-commerce platforms in Brazil and Latin America. Conversely, internet contributed the most to relative results, as the portfolio’s overweight position in this subsector more than offset the drag from stock selection. Shares of Tencent Holdings gained ground in a difficult market, lifted by expectations that the coronavirus outbreak in Hubei province and beyond could drive a spike in mobile gaming and consumption of online content as more people stay home.

Holdings

Total
Holdings
42
Largest Holding Alibaba Group Holding 9.86% Was (30-Sep-2019) 10.55%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 54.51% View Top 10 Holdings Monthly data as of 29-Feb-2020

Largest Top Contributor^

Alibaba Group Holding
By 1.56%
% of fund 9.79%

Largest Top Detractor^

Workday
By -0.40%
% of fund 4.52%

^Absolute

Quarterly Data as of 31-Dec-2019

Top Purchase

ServiceNow
4.08%
Was (30-Sep-2019) 1.66%

Top Sale

Intuit
3.91%
Was (30-Sep-2019) 5.81%

Quarterly Data as of 31-Dec-2019

31-Dec-2019 - Alan Tu, Portfolio Manager ,

We added opportunistically to the portfolio's positions in high-quality software names, taking advantage of company-specific weakness. We reduced the portfolio's allocation to internet, mostly trimming our large-cap holdings on strength to manage position size. In addition, we refined the portfolio's positioning in semiconductors, paring some holdings and establishing new positions in names that we believe offer favorable risk/reward profiles.

Software

We favor high-quality software-as-a-service companies that we believe stand to take share from legacy providers. We regard demand for cloud-based enterprise software as relatively resilient because these digital investments usually drive efficiency gains for customers and help them to maintain their competitive edge. Although enterprises have embraced the transition to the cloud, we believe this powerful secular trend has a long growth runway.

  • We aggressively added to the portfolio's position in ServiceNow, a software-as-a-service company that we believe should benefit from the growing importance of IT to workforce productivity within large enterprises. The stock sold off after the company announced a CEO transition. Although this departure could increase the risk of disruptions in the near term, we believe the new CEO should prove to be a good fit and remain confident in the company's long-term growth story. In our view, ServiceNow's highly scalable, customizable, and easy-to-use cloud-based ticketing platform for managing IT service requests and automating a wide range of workflow processes should continue to take market share. We also value ServiceNow's track record of moving into adjacent product categories and business functions, a strategy that expands its total addressable market and creates a significant opportunity for cross-selling.
  • We added to Zendesk on weakness. The company has emerged as a leading provider of cloud-based customer service and engagement platforms. This area has attracted a high level of investment, as business-to-consumer operations must hone their digital experiences to remain competitive. We believe Zendesk's positioning and commitment to innovation create a long runway for robust revenue growth
  • We added to Atlassian, a leading provider of on-premises and cloud-based workflow and collaboration software for enterprises that has built a strong foothold among application developers. We like the company's opportunity to grow OpsGenie's user base and improve monetization of Trello through the introduction of new features. We expect Atlassian to benefit as software and application developers become increasingly important at enterprises of all sizes and see the potential for its collaboration and project management tools to gain further traction outside the IT department. In addition to Atlassian's long growth runway, we value its sales efficiency.
  • We reduced New Relic, a software company that specializes in application-monitoring solutions designed to help developer and IT operations teams to identify and address performance issues in a timely manner.

Internet

We remain attuned to the likelihood of stepped-up regulation of Amazon.com, Facebook, and Alphabet, Google's parent company. However, we strive to take a balanced view and not lose sight of these companies' competitive advantages and long-term prospects. To varying degrees, we think strong balance sheets, internal talent, superior computing infrastructure, and valuable data position these companies to drive future innovation.

  • We trimmed Alibaba Group Holding, Alphabet, and Facebook on strength to manage position size.
  • We reduced the portfolio's position in Tencent Holdings, in part to reflect the sensitivity of its advertising business to the macroeconomic environment.
  • We believe Magazine Luiza boasts one of the leading e-commerce platforms in Brazil and Latin America, thanks to its digital prowess and the cost advantages and superior service that come from leveraging its existing store footprint. We like the company's leverage to the secular shift toward online retail and the potential to broaden its product selection, expand its user base, and increase transaction frequency by attracting brands and third-party sellers to its platform. Over time, we believe digital payments and financial services could emerge as additional growth drivers. We initiated a position in Magazine Luiza.

Semiconductors

The strong performance of semiconductor stocks this year has raised the bar of expectations for this cyclical subsector. We took advantage of this strength to trim some of our winners and rotate into names that we believe offer exposure to idiosyncratic growth stories.

  • ASML Holding specializes in lithography equipment that enables semiconductor manufacturers to improve memory and logic chip performance by including more transistors on a silicon wafer. We like ASML Holding's monopoly position in next-generation lithography equipment, tools that we believe will be essential to producing the leading-edge chips needed to power AI and other intensive processes. We pared ASML Holding on strength.
  • We trimmed Samsung Electronics on strength. We believe the leading producer of memory chips, smartphones, and consumer electronics stands to benefit from a tightening supply/demand balance in memory markets. Over the longer term, we expect the low-cost producer of memory chips to benefit from a consolidated industry and a favorable demand outlook.
  • We initiated a position in Advanced Micro Devices, the second-largest player in central (CPU) and graphics processing units (GPU). In our view, the market underestimates the company's earnings power and potential to take share as its advanced, 7-nanometer CPU enters the market well ahead of Intel's rival product. In addition to Advance Micro Devices' superior technology and head start in qualifying data center workloads, we appreciate the margin advantages associated with outsourcing fabrication and the pricing support that should come from the rising cost curve for advanced CPUs.

Media & Entertainment

We remain selective in media and entertainment and prefer innovative companies that can leverage their high-quality content and superior user experience to take share as consumers increasingly embrace streaming on-demand services.

  • Netflix's stock rallied on its strong slate of content launches for the fourth quarter and optimism that customer churn related to the launch of Walt Disney's streaming service would be limited. We appreciate Netflix's opportunity to grow its international subscriber base, its robust user data that inform internal content creation, and the potential for significant cash flow generation as the company builds scale and its capital expenditures moderate. We believe that the company's investments in marketing and original programming should further reinforce its position in consumers' entertainment diets and budgets. In our view, the market does not fully appreciate Netflix's scale advantage and its ability to leverage its content on a global basis.

Industry

Total
Industries
19
Largest Industry Internet Media/Advertising 20.75% Was (30-Jun-2019) 20.67%
Other View complete Industry Diversification

Monthly Data as of 31-Jul-2019

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Internet Media/Advertising
By20.74%
Fund 20.75%
Indicative Benchmark 0.01%

Largest Underweight

IT Services
By-14.55%
Fund 1.38%
Indicative Benchmark 15.93%

Monthly Data as of 31-Jul-2019

29-Feb-2020 - Alan Tu, Portfolio Manager ,
We took advantage of the sharp pullback in global equity markets to start or add to positions in companies that stand to benefit from continued growth in e-commerce and online payments. These purchases increased our allocation to the financial services subsector, although the portfolio remained underweight relative to the benchmark. We were also active in the software subsector and reduced our position here by generally selling stocks that had run up in recent months.

Regions

Total
Regions
5
Largest Region North America 72.45% Was (31-Jan-2020) 73.75%
Other View complete Region Diversification

Monthly Data as of 29-Feb-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Pacific Ex Japan
By7.83%
Fund 19.04%
Indicative Benchmark 11.21%

Largest Underweight

North America
By-4.58%
Fund 72.45%
Indicative Benchmark 77.03%

Monthly Data as of 29-Feb-2020

Countries

Total
Countries
10
Largest Country United States 72.18% Was (31-Jan-2020) 73.46%
Other View complete Country Diversification

Monthly Data as of 29-Feb-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Top Contributor

N/A

Top Detractor

N/A

Largest Overweight

China
By13.29%
Fund 14.44%
Indicative Benchmark 1.15%

Largest Underweight

Taiwan
By-3.88%
Fund 1.29%
Indicative Benchmark 5.17%

Monthly Data as of 29-Feb-2020

Team (As of 27-Mar-2020)

Alan Tu

Alan Tu is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is president of the Investment Advisory Committee of the Global Technology Equity Strategy. Previously, he was an investment analyst following software companies in the technology sector. Mr. Tu is a vice president and an Investment Advisory Committee member of the U.S. Small Cap Growth and Science & Technology Strategies. He is a vice president of T. Rowe Price Group, Inc. 

Mr. Tu has seven years investment experience, five of which have been with T. Rowe Price. He joined the firm in 2014 after serving as a summer intern with T. Rowe Price in 2013, covering broadcast TV companies. Previously, Mr. Tu was an analyst at Ananda Capital Management, where he conducted analyses of small-cap Chinese and U.S. equities, and a valuation associate at Huron Consulting Group.

Mr. Tu earned a B.S., summa cum laude, in business administration from the University of California-Berkeley and an M.B.A., with honors, from the University of Chicago Booth School of Business. Mr. Tu also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2019
  • Years at
    T. Rowe Price
    5
  • Years investment
    experience
    6

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $15,000 $100 $100 5.00% 175 basis points 1.85%
Class I $2,500,000 $100,000 $0 0.00% 85 basis points 0.91%
Class Q $15,000 $100 $100 0.00% 85 basis points 0.95%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.09%

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

Dismiss
Tap to dismiss

Download

Latest Date Range
Audience for the document: Share Class: Language of the document:
Download Cancel

Download

Share Class: Language of the document:
Download Cancel
Sign in to manage subscriptions for products, insights and email updates.
Continue with sign in?
To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
Continue Cancel
Once registered, you'll be able to start subscribing.

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

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

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest