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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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

US Equity Fund

Formerly US Large-Cap Equity Fund

Style agnostic investing in larger US companies.

ISIN LU1319833791 Bloomberg TRUSLIE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

14.53%
$750.3m

1YR Return
(View Total Returns)

Manager Tenure

28.66%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.27
4.38%

Inception Date 08-Jul-2016

Performance figures calculated in EUR

31-Aug-2021 - Jeff Rottinghaus, Portfolio Manager ,
The global economic recovery has been faster and stronger than most expected, in large part due to sizable fiscal and monetary stimulus measures. However, there are potential risks to growth including challenges in further containing the pandemic, which we will be monitoring. As stimulus has continued, and significantly more spending is being discussed by policymakers, interest rate and inflation concerns have also increased - a market reaction we feel is well founded.
Jeff Rottinghaus
Jeff Rottinghaus, Portfolio Manager

Jeff Rottinghaus is a portfolio manager in the U.S. Equity Division. He is president of the US Large-Cap Core Equity Strategy and chairman of its Investment Advisory Committee. In addition, he is a vice president and an Investment Advisory Committee member of the US Quantitative U.S. and US Dividend Growth Strategies. Jeff also is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

The global economic recovery has been faster and stronger than most expected, in large part due to sizable fiscal and monetary stimulus measures over the past year. We believe this is likely to contribute to strong economic growth over the second half of 2021. However, there are potential risks to growth that we will be monitoring in the months ahead, including challenges in further containing the coronavirus pandemic. As stimulus has continued, and significantly more spending is being discussed by policymakers, interest rate and inflation concerns have also increased, a market reaction we feel is well founded. We also feel the market may ultimately be underestimating the magnitude of inflation in the intermediate term. Meanwhile, price/earnings multiples in some sectors and stocks imply demanding earnings expectations. Even relatively strong second-half results might fail to meet those expectations, generating market volatility.

Going forward, it will be critical to continue seeking out companies that appear well positioned with lasting competitive advantages in any market environment, while avoiding firms that face longer-term secular challenges. We believe careful fundamental research will be necessary to find opportunities, and we will continue to search for investment opportunities in select areas of the market, utilizing our bottom-up stock selection approach. As always, we rely on our global research team of industry specialists to uncover fundamentally sound companies and remain committed to providing quality, risk-adjusted returns over the long term.

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 from large capitalization companies in the United States.

Investment Approach

  • Carefully constructed portfolio of the portfolio manager’s highest conviction investment ideas supported by our deep pool of U.S. equity analysts.
  • Core style targeting attractive opportunities across the investable universe irrespective of growth or value style.
  • Investment process that:~~leverages the stock selection capabilities of our global research team;^^~~emphasizes fundamental bottom-up stock selection;^^~~is combined with an in-depth valuation assessment;^^~~has rigorous portfolio construction.^^
  • Active risk management process integrated throughout our analysis.
  • Focused Large-Cap approach with stock selection the primary source of value added.
  • High conviction portfolio takes meaningful bets based on rigorous proprietary research.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

Portfolio Construction

  • Roughly 50-60 securities.
  • Invest in high conviction ideas over a two-year time horizon.
  • Typical position size range: +/- 4% relative to the benchmark.
  • Sector weights: Generally limited to +/- 10% relative to the benchmark.
  • Expected tracking error: targeting 400 basis points.
  • Expected active share: targeting 70% or greater.

Performance (Class In | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 28.66% 14.53% 13.54% 13.48%
Indicative Benchmark % 29.06% 14.74% 14.71% 14.68%
Excess Return % -0.40% -0.21% -1.17% -1.20%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Data as of 31-Aug-2021

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 39.11% 14.29% N/A 12.71%
Indicative Benchmark % 37.91% 15.18% N/A 14.03%
Excess Return % 1.20% -0.89% N/A -1.32%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Data as of 30-Jun-2021

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 24-Sep-2021 Quarter to DateData as of 24-Sep-2021 Year to DateData as of 24-Sep-2021 1 MonthData as of 31-Aug-2021 3 MonthsData as of 31-Aug-2021
Fund % -2.19% 3.36% 18.07% 2.19% 7.04%
Indicative Benchmark % -1.49% 3.73% 18.85% 2.95% 7.72%
Excess Return % -0.70% -0.37% -0.78% -0.76% -0.68%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Performance figures calculated in EUR

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 June 2019, 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-Aug-2021 - Jeff Rottinghaus, Portfolio Manager ,
U.S. equities produced gains in August, despite some volatility. At the portfolio level, the information technology sector was the largest detractor from relative results due to stock selection. Zoom Video Communications reported better-than-expected revenue and earnings for its most recent quarter, but its shares fell in response to declining sales growth. We like Zoom for its distribution strength as it has distanced itself from competitors and reached a mass-market scale. Its strategy of under-monetising its meetings and cloud phone solutions in order to gain near-term market share provides it with additional revenue potential and gives us incremental confidence in its ability to sustain its growth over the long term. The consumer staples sector also weighed on relative results due to security selection. Shares of snack company Mondelez International declined. In contrast, financials had the largest positive impact due to stock selection. In recent months, Goldman Sachs has benefitted from strong investment banking revenue as the U.S. economy continues to recover. We believe Goldman Sachs is demonstrating its ability to execute on its strategy of shifting away from capital-intensive, low-return activities and toward more lucrative businesses like consumer banking, private equity, and wealth management.

Holdings

Total
Holdings
65
Largest Holding Microsoft 6.54% Was (31-Mar-2021) 6.16%
Other View Full Holdings Quarterly data as of  30-Jun-2021
Top 10 Holdings 32.82% View Top 10 Holdings Monthly data as of  31-Aug-2021

Largest Top Contributor^

Microsoft
% of fund 6.54%

Largest Top Detractor^

NextEra Energy
% of fund 1.51%

^Absolute, percentages based on the difference between the total net assets of the two largest holdings of the fund.

Quarterly Data as of 30-Jun-2021

Top Purchase

RenaissanceRe Holdings (N)
0.85%
Was (31-Mar-2021) 0%

Top Sale

Microsoft
5.93%
Was (31-Mar-2021) 6.16%

Quarterly Data as of 30-Jun-2021

30-Jun-2021 - Jeff Rottinghaus, Portfolio Manager ,

Within the portfolio, our positioning is mainly driven by fundamental, stock-specific views. During the quarter, we selectively added to high-quality names with attractive valuations and strong balance sheets. Conversely, we trimmed names where we did not have complete confidence in their balance sheets or where we found better risk/reward ideas. We will continue to look for high-quality companies that have opportunities to increase their market share or have barriers to entry around their business that will allow them to grow organically in a variety of market environments.

Industrials and Business Services

The industrials and business services sector contains many names that are cyclically tied to either infrastructure or capital spending. The sector is our largest overweight relative to the S&P 500 Index, where we invest in companies with exposure to diverse end markets that feature solid business models and strong cash flow generation. Our largest sector holdings are Howmet Aerospace, GE, and Honeywell International.

  • We initiated a position in Copart, which operates the leading salvage auction marketplace in the United States operates the leading salvage auction marketplace in the United Statesoperates the leading salvage auction marketplace in the U.S. We expect volumes to reaccelerate as mobility rates increase coming out of the pandemic. Going forward, we also believe that Copart should benefit from scale advantages and underappreciated structural pricing tailwinds.
  • We eliminated our position in Parker-Hannifin, a leading manufacturer of motion control and engineered products for the industrial and aerospace markets, on recent strength and in favor of higher-conviction investment ideas elsewhere in the sector.

Health Care

The health care sector is one of our largest absolute and relative overweight positions versus the benchmark, as we believe certain industries offer compelling, relatively stable growth potential that can perform well over the long term. It also has a strong secular tailwind from an aging U.S. population. We favor companies that offer relatively stable growth potential and/or that are well positioned to take advantage of long-term trends by offering highly innovative products. Our largest industry weight is in pharmaceuticals, including Johnson & Johnson and Eli Lilly. We also have a sizable position in health care equipment and supplies, including Medtronic and Danaher.

  • We eliminated Becton, Dickinson & Company, the largest manufacturer of single-use medical needles, syringes, and blood collection devices, in favor of other investment opportunities elsewhere in the portfolio.

Information Technology

Information technology represents our largest absolute sector weight. Within the sector, we favor companies with durable business models that address large and growing markets, such as increasing demand for business technology solutions. Our largest exposure is to the software industry, where we hold several names including Microsoft and Salesforce.com. Within the sector we also hold sizable positions in Visa, Advanced Micro Devices, and Fiserv.

  • We initiated a position in software-as-a-service (SaaS) company ServiceNow on recent weakness. 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 initiated a position in Zoom Video Communications. We like the company for its distribution strength as it has distanced itself from competitors and reached a mass-market scale. Its strategy of under-monetizing its meetings and cloud phone solutions in order to gain near-term market share provides it with additional revenue potential and gives us incremental confidence in its ability to sustain its growth over the long term.
  • We eliminated Micron Technology, the leading producer of memory chips, on relative strength and as our thesis had played out. Recently, shares of the company have benefited from improving memory chip demand, strength in its data center segment, a recovery in smartphone units, and acceleration of 5G infrastructure deployments.

Consumer Discretionary

The consumer discretionary sector is composed of a diverse group of industries, including retailers, auto manufacturers, and hotel and restaurant operators. Our primary exposure is to the internet and direct marketing industry via our position in Amazon.com, which we believe is poised to benefit from growth in online shopping and is also a major player in the cloud computing space. We also have meaningful exposure to the hotels, restaurants, and leisure industry, primarily through McDonald's and Starbucks.

  • We added to the portfolio's position in Starbucks, the largest coffee retailer in the world. We believe that store closures should improve average-unit volumes and margins, while the company's digital leadership and beverage innovation could also add value.
  • We trimmed off-price retailer TJX on recent strength. During the period, the company reported strong sales metrics from its most recent quarter. We believe TJX offers attractive growth potential in the compelling off-price segment as it continues to benefit from consumer demand and same-store sales growth momentum during the economic recovery. We also think the market underappreciates the company's ability to drive margin improvement through expense leverage.

Sectors

Total
Sectors
10
Largest Sector Information Technology 25.11% Was (31-Jul-2021) 25.69%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2021

Indicative Benchmark: S&P 500 Index

Top Contributor^

Communication Services
Net Contribution 0.65%
Sector
-0.05%
Selection 0.70%

Top Detractor^

Industrials & Business Services
Net Contribution -0.26%
Sector
-0.13%
Selection
-0.13%

^Relative

Quarterly Data as of 30-Jun-2021

Largest Overweight

Health Care
By2.33%
Fund 15.71%
Indicative Benchmark 13.39%

Largest Underweight

Information Technology
By-2.90%
Fund 25.11%
Indicative Benchmark 28.00%

Monthly Data as of 31-Aug-2021

31-Aug-2021 - Jeff Rottinghaus, Portfolio Manager ,
The industrials and business services sector contains many names that are cyclically tied to either infrastructure or capital spending. The sector is one of our largest overweight positions relative to the S&P 500 Index, where we invest in companies with exposure to diverse end markets that feature solid business models and strong cash flow generation. Our largest sector holdings are Howmet Aerospace, GE, and Honeywell International.

Team (As of 10-Sep-2021)

Jeff Rottinghaus

Jeff Rottinghaus is a portfolio manager in the U.S. Equity Division. He is president of the US Large-Cap Core Equity Strategy and chairman of its Investment Advisory Committee. In addition, he is a vice president and an Investment Advisory Committee member of the US Quantitative U.S. and US Dividend Growth Strategies. Jeff also is a vice president of T. Rowe Price Group, Inc.

Jeff’s investment experience began in 2001 when he joined T. Rowe Price, beginning in the U.S. Equity Division. Prior to this, Jeff was employed by Ernst & Young as a financial consultant. Jeff also was part owner of software consulting firm Kelly Levey & Associates.

Jeff earned a B.S. in business administration from Bowling Green State University and an M.B.A. in finance from the University of Pennsylvania, The Wharton School. He is a certified public accountant.

  • Fund manager
    since
    2016
  • Years at
    T. Rowe Price
    20
  • Years investment
    experience
    21
Eric Papesh, CFA, BA, MBA

Eric Papesh is a portfolio specialist based in London in the U.S. Equity Division. Eric supports the US Smaller Companies Equity and US Large-Cap Equity Income Strategies offered in the Europe, Middle East, and Africa and Asia-Pacific regions. Eric is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Eric’s investment experience began in 1994, and he has been with T. Rowe Price since 2014, beginning in the ISG division as a portfolio specialist. Prior to this, Eric was employed by Russell Investments where he focused on U.S. equity investment strategies.

Eric earned a B.A. in business administration, with concentrations in finance and information systems, and an M.B.A. in business administration from the University of Washington. Eric has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    26

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% 150 basis points 1.62%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.70%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.77%

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