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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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SICAV

Global Value Equity Fund

Targeting attractively valued global companies with prospects for improving earnings growth.

ISIN LU0859255472 Bloomberg TRPGVEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

0.00%
$47.3m

1YR Return
(View Total Returns)

Manager Tenure

-4.47%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-1.06
3.48%

Inception Date 28-Nov-2012

Performance figures calculated in USD

Other Literature

31-Oct-2020 - Sebastien Mallet, Portfolio Manager,
Value stocks narrowly outperformed their growth counterparts in October but valuation spreads have reached 90-year extremes. As we look toward a potential economic recovery period over the next 12–18 months, this could provide a positive backdrop for value investing. Any change in the market’s longer-term prognosis for inflation and interest rates would also be very supportive.
Sebastien Mallet
Sebastien Mallet, Portfolio Manager

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Despite some short-lived rallies by value equities, growth stocks continued their long track record of outperformance. As we look toward a potential recovery period over the next 12-18 months, this could provide a positive backdrop for value investing. Any change in the market's longer-term prognosis for inflation and interest rates should similarly be very supportive.

In the U.S., the government passed a record-setting stimulus package, amounting to more than 10% of its gross domestic product. Meanwhile, the Fed acted rapidly to inject a massive amount of liquidity into markets in hopes to instill a floor in bond pricing and prevent a liquidity crisis. For now, the extreme measures appear to be alleviating some of the pain as credit markets have shown signs of stabilization. However, it remains to be seen if these measures will be enough to get markets through this crisis. Within the market dislocation, we find opportunities in well-run companies, particularly those with more cyclical characteristics.

European nations have been hit hard by the spread of the virus. Fiscal stimulus measures are being rolled out, and monetary policy remains accommodative. Markets in the region have been among the worst performers this year, and we are able to find well-run companies with particularly inexpensive valuations.

In Asia, while the first cases of the coronavirus were reported in China, lockdown measures began to be eased earlier than the rest of the world and subsequent outbreaks appear to have been quickly contained. A return to some normalization has helped to improve investor sentiment. We found opportunities to add to Chinese companies on weakness, although we may look to trim positions here should they begin to appear more fairly valued. In Japan, despite having one of the world's largest stimulus packages, a weak global backdrop remains a risk to the market's outlook, especially given the importance of its export sector. Crucially for investors such as ourselves, corporate governance has been improving in recent years, with companies becoming more shareholder-friendly, and we continue to identify stocks with compelling valuations befitting of our value perspective.

We concentrate on the bottom-up view, and our strategy continues to invest across the value spectrum in the best ideas from our global research platform. We concentrate on the bottom-up view, with a focus on balancing our exposure to economically sensitive and "deep value" names; holding companies with strong free cash flow generation not yet fully appreciated by the market and with the scope to increase shareholder returns; as well as looking for pockets of controversy where fundamentally sound, well-run businesses face unwarranted investor skepticism. Given our robust research platform and collective experience, we are confident in our ability to find these unique opportunities before their potential for substantial prosperity becomes obvious to other investors.�

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 widely diversified portfolio of undervalued stocks of companies anywhere in the world, including emerging markets.

Investment Approach

  • Diversified portfolio investing in companies located throughout the globe.
  • Emphasize attractively valued companies with prospects for improving earnings growth.
  • Employ rigorous and comprehensive research to identify and assess investment opportunities.
  • Allocate country and sector positions through consideration of:
    • Attractiveness of individual investments
    • Macroeconomic environment

Portfolio Construction

  • Typically 80-100 stock portfolio
  • Individual positions typically range from 0.30% to 3.00% — average position size of 1.00%
  • Country and sector weights generally range +/- 15% deviation from the benchmark
  • Maximum of 10% in emerging markets
  • Reserves range from 0% to 10%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % -4.47% 0.00% 4.46% 7.84% 7.84%
Indicative Benchmark % 4.36% 5.96% 8.13% 9.47% 9.47%
Excess Return % -8.83% -5.96% -3.67% -1.63% -1.63%

Inception Date 28-Nov-2012

Manager Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  31-Oct-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -0.16% 1.10% 6.35% 8.18%
Indicative Benchmark % 10.41% 7.74% 10.48% 10.01%
Excess Return % -10.57% -6.64% -4.13% -1.83%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  30-Sep-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 20-Nov-2020 Quarter to DateData as of 20-Nov-2020 Year to DateData as of 20-Nov-2020 1 MonthData as of 31-Oct-2020 3 MonthsData as of 31-Oct-2020
Fund % 15.57% 13.44% 4.68% -1.84% -0.87%
Indicative Benchmark % 10.87% 7.47% 9.30% -3.07% -0.16%
Excess Return % 4.70% 5.97% -4.62% 1.23% -0.71%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Indicative Benchmark: MSCI World 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.

Index 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. 

31-Oct-2020 - Sebastien Mallet, Portfolio Manager,
Despite a strong start to the month, global equity markets declined in October, with sentiment weighed down by increased uncertainty on a number of fronts. These included the doubts about the provision of further fiscal stimulus, the weakness of the global economy, the outcome of the U.S. Presidential election, and the development of vaccines against COVID-19, the disease caused by the coronavirus. The emergence of a second wave of the virus in several countries, particularly in Europe, further held back confidence—as did a warning from European Central Bank President Christine Lagarde that the European economic recovery was at risk of “losing momentum”. The weakest performing sectors of the benchmark index were energy, due to a lower oil price, and information technology (IT), which sold off on the back of disappointing results from a number of large players, including Apple. In the portfolio, relative performance was boosted by stock selection within IT and financials. Our holdings in several key semiconductor-related names were particularly beneficial, as were a number of large insurers who reported better-than-expected quarterly results following a very challenging first half of the year.

Holdings

Total
Holdings
99
Largest Holding NextEra Energy 2.95% Was (30-Jun-2020) 2.67%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 18.55% View Top 10 Holdings Monthly data as of 31-Oct-2020

Largest Top Contributor^

NextEra Energy
By 1.03%
% of fund 2.98%

Largest Top Detractor^

AbbVie
By -0.27%
% of fund 1.59%

^Absolute

Quarterly Data as of 30-Sep-2020

Top Purchase

Fiserv (N)
1.63%
Was (30-Jun-2020) 0%

Top Sale

Chevron (E)
0.00%
Was (30-Jun-2020) 1.48%

Quarterly Data as of 30-Sep-2020

30-Sep-2020 - Sebastien Mallet, Portfolio Manager,

Over the course of the third quarter, we made a number of adjustments to our sector positioning. Within IT, we identified what we believe to be a compelling opportunity in a global payments fintech company. We also raised the portfolio's materials weighting, particularly in the area of packaging, and initiated a position within consumer staples. We reduced our exposure to energy, health care, and industrials and business services.

Our major overweight sector positions at the end of September were in utilities, materials, and financials. The largest underweight sector positions included IT, consumer staples, and communication services. On a geographic basis, our main underweight allocation is in the U.S. where we believe valuations are still expensive, while the largest relative overweight position is in China. We see value in emerging markets, the UK, Russia, and Korea.

IT

IT is a very large and diversified sector and we generally see the most opportunities in cyclical areas, particularly memory semiconductor-related names. Our analysts in this area are very experienced and have an in-depth understanding of the sector. The sector has very short cycles, and the market is currently concerned about near-term momentum; we have bought for when the cycle recovers. Our key holdings here include Samsung Electronics, SK Hynix, and Micron Technology.

Overall, we have a long-standing underweight position in the IT sector, but over the course of the quarter we raised the extent of our exposure, initiating a position in Fiserv. The financial services technology company operates primarily through the payments and financial segments. In our view, the company is well positioned to enjoy a multiyear period of above-average organic growth as the penetration rate of mobile banking continues to increase. During this period, we expect the business will be able to generate strong growth in earnings per share. The combination of stable growth, a defensive earnings profile, and a strong free cash flow yield make the stock an attractive late-cycle investment.

Materials

In the second quarter of 2020, we raised our exposure to the materials sector, and in the most recent quarter, we further increased the size of our weighting, including new holdings in Packaging Corporation of America and Stora Enso. We like three areas within the sector: (i) cyclical materials, such as copper and iron ore; (ii) previous metals (gold, silver); and (iii) cyclical areas, such as packaging.

  • Packaging Corporation of America is one of North America's largest producers of containerboard and a major producer of uncoated freesheet. The business' high integration rate, limited export exposure, virgin-focused mix, and disciplined management team combine to result in superior margins and returns versus peers. Containerboard is an industry with favorable long-term fundamentals driven by consolidation, forward integration, and an elevated capital-incentive curve, while cyclical weakness provided an attractive entry point for the stock.

  • Stora Enso is a Finland-based producer of paper-based packaging, wood products used in building applications, and pulp, a key intermediate material used to produce items such as tissue and fiber-based clothing. We expect the company to revalue its forestry assets in the short term, which is likely to boost sentiment toward the stock. Furthermore, the company's industrial assets, which are highly levered to the price of pulp, are enduring the worst cyclical downturn in pulp prices in at least two decades, and we therefore expect strong upside potential as we move into a recovery.

Consumer Staples

The portfolio remains underweight consumer staples, but within the sector, we built a position in Coca-Cola, a global marketer of non-alcoholic beverages. Most of the system's manufacturing and distribution assets are housed within independent bottlers around the world, but the company still retains significant bottling assets in the U.S. and select emerging markets. The company has restored growth in sales and revenues on a sustainable basis, though profitability has yet to follow due to non-operating headwinds. We expect earnings per share growth to resume going forward. The stock is currently out of favor among investors as it sells into the "out-of-home" market, which has been significantly affected by the pandemic. However, Coca-Cola currently pays a dividend that is higher than many U.S. utilities, and we believe that if it is able to repair its business and grow again, there is considerable upside to its share price.

Energy

When U.S. oil prices turned negative in April, we added to our exposure. As this anomaly has now played out, we have once again reduced our exposure, selling out of both integrated energy company Chevron and French energy company Total. We believe that the transition to cleaner energy and the potential for oil prices to remain lower for longer will be a headwind for the sector over the longer term.

Industrials and Business Services

Over the course of the third quarter, we moved further underweight industrials and business services. This was mainly due to the closing of our position in Toshiba, a Japanese electronics conglomerate, which engages in the manufacture and sale of electronic and electrical products. The delay in the initial public offering of the memory division (Kioxia) was a headwind for the stock, although not unexpected. While certain businesses within the conglomerate are generating healthy profits, others offer only thin margins and would be more susceptible to a global multiyear recession.

Despite this sale, we are positive on Japan. We see increasing evidence that Abe's reforms are finally yielding the intended corporate restructuring. The recent proposed deal between NTT and NTT DoCoMo is, in our view, an excellent example of this.

Health Care

We eliminated our holding in German conglomerate Bayer, which is composed of four divisions: pharmaceuticals, crop science, consumer health, and animal health. Management announced a profit warning for 2021, as well as cost-cutting measures and a reduction in future dividends. Bayer's crop science division in particular has struggled, and the company's earnings outlook has dimmed.

Sectors

Total
Sectors
11
Largest Sector Financials 17.08% Was (30-Sep-2020) 16.45%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI World Index

Top Contributor^

Materials
Net Contribution 0.37%
Sector
0.15%
Selection 0.22%

Top Detractor^

Consumer Discretionary
Net Contribution -0.65%
Sector
-0.23%
Selection
-0.42%

^Relative

Quarterly Data as of 30-Sep-2020

Largest Overweight

Utilities
By5.49%
Fund 8.91%
Indicative Benchmark 3.42%

Largest Underweight

Information Technology
By-4.64%
Fund 17.00%
Indicative Benchmark 21.64%

Monthly Data as of 31-Oct-2020

31-Oct-2020 - Sebastien Mallet, Portfolio Manager,
In recent weeks we have been buying cyclical stocks which stand to benefit from an economic recovery, particularly within industries where earnings have been hard hit by the pandemic, including travel, restaurants, bank loans, and energy. We believe the turning points for these stocks could be marked by the availability of a vaccine and/or the emergence of inflation. We raised the portfolio’s weighting to the industrials and business services sector. This included initiating positions in a U.S.-based airline as well as a highly cyclical, leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.

Regions

Total
Regions
5
Largest Region North America 61.21% Was (30-Sep-2020) 59.31%
Other View complete Region Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI World Index

Top Contributor^

Latin America
Net Contribution 0.25%
Region
0.01%
Selection 0.24%

Top Detractor^

United States
Net Contribution -1.57%
Region
-0.15%
Selection
-1.42%

^Relative

Quarterly Data as of 30-Sep-2020

Largest Overweight

Pacific Ex Japan
By5.10%
Fund 8.60%
Indicative Benchmark 3.50%

Largest Underweight

North America
By-8.43%
Fund 61.21%
Indicative Benchmark 69.64%

Monthly Data as of 31-Oct-2020

Countries

Total
Countries
19
Largest Country United States 57.22% Was (30-Sep-2020) 55.44%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI World Index

Largest Overweight

China
By3.69%
Fund 3.73%
Indicative Benchmark 0.04%

Largest Underweight

United States
By-9.35%
Fund 57.22%
Indicative Benchmark 66.57%

Monthly Data as of 31-Oct-2020

Team (As of 01-Oct-2020)

Sebastien Mallet

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Mallet has 19 years of investment experience, 14 of which have been at T. Rowe Price. Prior to joining the firm in 2005, he was a telecom banker at Credit Suisse First Boston in the Tokyo and London offices. Mr. Mallet started his career as a financial analyst with France Telecom, based in Guangzhou, China, and Madrid, Spain.

Mr. Mallet earned an M.A., with honours, in finance from the University of Paris and an M.B.A. from the London Business School.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    19

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 $1,000 $100 $100 5.00% 160 basis points 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.85%

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