Strategy

QM US Small & Mid-Cap Core Equity

The QM US Small & Mid-Cap Equity Composite seeks long-term capital appreciation primarily through the investment in small and mid-cap companies. The strategy applies quantitative and active management techniques to achieve its investment objectives.

3YR Return Annualised (Net)
(View Total Returns)

Tracking Error
(3 Years)

4.27%
3.41%

1YR Return (Net)
(View Total Returns)

Information Ratio
(3 Years)

-0.83%
0.11

Inception Date 29-Feb-2016

Performance figures calculated in USD

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Sudhir Nanda, CFA, Ph.D.
Sudhir Nanda, CFA, Ph.D., Co-Portfolio Manager

Sudhir Nanda is a portfolio manager in the U.S. Equity Division. He is president of the Investment Advisory Committees of the QM US Small-Cap Growth Equity, QM US Small & Mid-Cap Core Equity, and QM Global Equity Strategies and is a member of the U.S. Equity Steering Committee. Sudhir also is a vice president of T. Rowe Price Group, Inc.

 

Strategy

Investment Approach

  • Employs a systematic, data-driven process to identify attractive stocks within the U.S. small- and mid-cap universes. Stocks are ranked based on fundamental metrics primarily drawn from the firm’s financial statements. Our stock selection approach reflects the following key investment convictions:
  • ~~We favor stocks that appear inexpensively valued relative to their respective industries and equity universes.^^
  • ~~We prefer companies that generate substantial free cash flow. Such companies have the potential to be self-financing and can continue to invest in periods when borrowing capital is not easy.^^
  • ~~We favor companies that have a high return on capital and use cash flows wisely in a manner that benefits shareholders; for example, by executing projects with an expected high return or via the reduction of share count through stock buybacks.^^
  • ~~We seek companies with high quality characteristics, including our evaluation of earnings quality, which identifies the stability of historic earnings and the expected volatility of future earnings.^^
  • ~~A smaller emphasis is placed on price momentum and earnings estimate revisions. A lesser emphasis on momentum typically results in longer investment horizons and reduced portfolio turnover.^^
  • While stock selection is based on a quantitative model, we do take into consideration fundamental research and other information that might not be fully captured in our models.
  • Relying on quantitative models entails the risk that the models themselves may be limited or incorrect, that the data that the models rely on may be incorrect or incomplete, and that the adviser may not be successful in selecting companies for investment or determining the weighting of particular stocks

Portfolio Construction

  • Well-diversified strategy of approximately 350 securities. The goal is to outperform the benchmark by owning a large number of good stocks instead of making large investments in a small number of stocks.
  • Each position is sized as a function of its expected outperformance, risk profile, and quality characteristics. Positions are limited to no more than 1% of portfolio cap weight.
  • In general, sector allocations will be fairly consistent with those of the Russell benchmark.
  • Expected annual turnover of less than 50% highlights the strategy’s relatively long-term orientation.

Holdings

Total
Holdings
334
Largest Holding Charles River Laboratories International 0.73% Was (30-Jun-2020) 0.61%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 6.48% View Top 10 Holdings Monthly data as of 30-Sep-2020

Top Purchase

Crown Holdings (N)
0.40%
Was (30-Jun-2020) 0.00%

Top Sale

Seattle Genetics
0.21%
Was (30-Jun-2020) 0.54%

Quarterly Data as of 30-Sep-2020

Sectors

Total
Sectors
11
Largest Sector Information Technology 17.45% Was (30-Jun-2020) 18.04%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2020

Benchmark: Russell 2500 Index

Largest Overweight

Consumer Discretionary
By0.47%
Portfolio 13.19%
Benchmark 12.72%

Largest Underweight

Financials
By-0.92%
Portfolio 12.32%
Benchmark 13.24%

Monthly Data as of 30-Sep-2020

Team (As of 01-Oct-2020)

Sudhir Nanda, CFA, Ph.D.

Sudhir Nanda is a portfolio manager in the U.S. Equity Division. He is president of the Investment Advisory Committees of the QM US Small-Cap Growth Equity, QM US Small & Mid-Cap Core Equity, and QM Global Equity Strategies and is a member of the U.S. Equity Steering Committee. Sudhir also is a vice president of T. Rowe Price Group, Inc.

Sudhir’s investment experience began in 1999, and he has been with T. Rowe Price since 2000, beginning in the U.S. Equity Division. Prior to this, Sudhir was employed by Pennsylvania State University as an assistant professor of finance. He also was employed by Tata Steel in India in financial and general management positions. 

Sudhir earned a B.A., with honors, in mathematics from St. Stephen's College in Delhi, India; an M.B.A. from the Indian Institute of Management in Calcutta, India; and a Ph.D. in finance from the University of Massachusetts, Amherst. He also has earned the Chartered Financial Analyst® designation. Sudhir served on the Financial Accounting Standards Board's User Advisory Council and has had several articles published in the areas of investments, mergers and acquisitions, and international finance. His papers have appeared in The Journal of Portfolio Management, Financial Management, and the Handbook of Equity Style Management.

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

  • Portfolio manager
    since
    2017
  • Years at
    T. Rowe Price
    20
  • Years investment
    experience
    21
Prashant Jeyaganesh

Prashant Jeyaganesh is an associate portfolio manager for the QM Global Equity Strategy and a quantitative analyst in the Quantitative Equity Group within the Equity Division of T. Rowe Price. He is an Investment Advisory Committee member of the QM U.S. Small-Cap Growth, QM Global Equity, and QM U.S. Value Equity Strategies. He is also a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Funds, Inc. 

Mr. Jeyaganesh has 13 years of investment experience, all of which have been with T. Rowe Price. He joined the firm in 2006. 

Mr. Jeyaganesh earned a B.Sc. in biomedical engineering, with a minor in mathematics, from Johns Hopkins University. He has also earned the Chartered Financial Analyst designation.

  • Portfolio manager
    since
    2017
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    14
Vidya Kadiyam, CFA

Vidya Kadiyam is a quantitative analyst in the Quantitative Equity Group. She is a vice president and an Investment Advisory Committee member of the US Capital Appreciation Strategy and the QM Global Equity, QM US Value Equity, and QM US Small & Mid-Cap Core Equity Strategies. She is a vice president of T. Rowe Price Group, Inc. 

Vidya’s investment experience began in 2008 when she joined T. Rowe Price, beginning in the Quantitative Group within the U.S. Equity Division. 

Vidya earned a B.S. in economics from the Massachusetts Institute of Technology and an M.Sc. in economics from the University of Chicago. She also has earned the Chartered Financial Analyst® designation.

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

  • Portfolio manager
    since
    2020
  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    12
Navneesh Malhan, CFA

Navneesh Malhan is a quantitative analyst in the Quantitative Equity Group. He is an Investment Advisory Committee member of the QM U.S. Value Equity Fund and QM U.S. Small & Mid-Cap Core Equity Fund. He is also a vice president of the T. Rowe Price Quantitative Management Funds. Navneesh is a vice president of T. Rowe Price Group, Inc. 

Navneesh’s investment experience began in 2010, and he has been with T. Rowe Price since 2015, beginning in the Quantitative Equity Group. Prior to this, Navneesh was employed by BlackRock in the Risk & Quantitative Analysis Group, where he primarily focused on developing risk factor/asset allocation models and portfolio construction issues. 

Navneesh earned a bachelor’s degree in engineering from Punjab University, an M.B.A. from the University of Delhi, and a master’s degree in financial engineering from the University of California-Berkeley. He also has earned the Chartered Financial Analyst® designation.

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

  • Portfolio manager
    since
    2020
  • Years at
    T. Rowe Price
    5
  • Years investment
    experience
    5

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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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