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SICAV

Global Focused Growth Equity Fund

Concentrating high conviction positions in leading global investment prospects.

ISIN LU0143563046 Valoren 1579114

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

16.37%
$1.8b

1YR Return
(View Total Returns)

Manager Tenure

16.47%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.87
5.76%

Inception Date 12-Jan-2006

Performance figures calculated in USD

Other Literature

31-Oct-2019 - David J. Eiswert, Portfolio Manager,
We believe the global economy is heading towards a crossroads. This is particularly true for the regulatory landscape for some big technology companies and U.S.-China trade relations. As such, we have been attempting to position the portfolio in such a way that we can participate in a rally driven by any positive resolutions (such as a trade deal) while dampening the negative effects of any deteriorating factors.
David J. Eiswert
David J. Eiswert, Lead Portfolio Manager

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

As we have previously stated, the world continues to pass through an ongoing cycle of Crisis, Response, Improvement, and Complacency (CRIC). Considering the significance of the challenges at hand, especially surrounding trade, we have been somewhat surprised by the lack of a meaningful response from world leaders, which has led to more uncertainty and volatility in equity markets. On the macro front, we have overhangs with trade, fading U.S. stimulus, and a slowdown in China that is also pulling down Europe. We are heading toward a macroeconomic crossroads and are looking to see how the world is going to respond.

Even though trade rhetoric has somewhat abated on both sides, a near-term substantive deal appears remote. It also seems likely that growth and inflation will continue to trend downward until policymakers respond. While the U.S. Federal Reserve cut rates for the first time in more than a decade in July and followed up with another cut in September, mixed messages have weakened its credibility. Similarly, we are surprised that the Chinese government has not yet reacted in any significant manner to stimulate its economy given the onslaught of weak economic data coming out of the country. The lack of response to these overhangs has pushed us toward this low-growth world that is characterized by an oscillation between euphoria and despair.

From our perspective, the most powerful responses would be a U.S.-China trade deal and meaningful Chinese stimulus, which we think are realistically possible over the next six to nine months. We have been positioning the portfolio to participate in such a scenario and have faded some of our more defensive names while adding to stocks that are gaining market share in their respective end markets and are cyclically depressed which we view as offensive in the current market environment. We have added to several tech industrial names that participate in automation and robotics and that are trading at increasingly attractive valuations. Our exposure in semiconductors reflects many secular growth companies, albeit with degrees of cyclical characteristics and earnings drivers that the market is discounting. We have been defending our Chinese internet names in prudent weights and they should perform well if some of the clouds around China lift, even if only partly. While our underweight to the U.S. is largely a result of our stock picking, we think the U.S. is likely to lag during the next upcycle. We are also going to start lapping the initial disruptions that trade caused a year ago and, if economic activity does not materially deteriorate, we should see some level of stabilization in global economic data.

Overall, we remain constructive on global equities and continue seeking to take advantage of market volatility to move around to better ideas. With a longer-term investment horizon and willingness to be contrarian, we believe it is critical to look beyond today's near-term challenges in order to identify tomorrow's opportunities in an environment that could look very different than the one that has prevailed in recent years.

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 that have the potential for above average and sustainable rates of earnings growth. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Single decision maker provides clear accountability.
  • Identify “best ideas” by assessing companies in a global sector context, using bottom-up approach to create focused, high- conviction portfolio.
  • Global research platform uses fundamental analysis to identify companies with superior and sustainable growth prospects, and improving fundamentals.
  • Macroeconomic and local market factors are integrated in stock selection decisions.
  • Valuation appeal is measured against local market and broad sector opportunity set.
  • Broad range of stocks across all capitalizations, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: typically 60-80 stocks
  • Individual positions: Typically 0.5%-5.0%
  • Emerging markets exposure: +/-15% of benchmark
  • Broad sector ranges: +/-15% of benchmark
  • Country ranges: +/-10% of benchmark (U.S.A. is +/-20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%, Maximum 10%
  • Expected tracking error: 400 to 800 basis points

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 16.47% 16.37% 12.10% 11.59% 14.28%
Indicative Benchmark % 12.59% 11.33% 7.08% 8.81% 9.14%
Excess Return % 3.88% 5.04% 5.02% 2.78% 5.14%

Inception Date 12-Jan-2006

Manager Inception Date 30-Sep-2012

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Oct-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 2.80% 14.29% 11.74% 11.44%
Indicative Benchmark % 1.38% 9.71% 6.65% 8.35%
Excess Return % 1.42% 4.58% 5.09% 3.09%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Nov-2019 Quarter to DateData as of 15-Nov-2019 Year to DateData as of 15-Nov-2019 1 MonthData as of 31-Oct-2019 3 MonthsData as of 31-Oct-2019
Fund % 2.68% 6.12% 27.12% 3.35% 0.49%
Indicative Benchmark % 2.11% 4.91% 21.90% 2.74% 2.41%
Excess Return % 0.57% 1.21% 5.22% 0.61% -1.92%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country 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.

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-2019 - David J. Eiswert, Portfolio Manager,
Global equities rallied in October amid optimism about global growth and as trade negotiations between the U.S. and China seemed to progress. At the portfolio level, our underweight in consumer staples, coupled with stock selection, helped relative returns the most. Shiseido, Japan’s largest cosmetics manufacturer, rose over the month on news that the firm would acquire Houston, Texas-based skincare brand Drunk Elephant. We think Shiseido is capable of outstanding revenue and share gains given its competitive advantage and dominance in prestige skincare. Conversely, health care hurt relative performance. Shares of health care conglomerate Danaher fell with a number of other life sciences tools names due to concerns about slowing demand in China. The company also reported lacklustre earnings near the end of the month. We have conviction in the firm and believe in the execution capabilities of management to deliver on core earnings growth targets and its ability to add value through mergers and acquisitions, most recently its decision to buy GE’s biopharma business.

Holdings

Total
Holdings
78
Largest Holding JPMorgan Chase 3.02% Was (30-Jun-2019) 1.78%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 23.87% View Top 10 Holdings Monthly data as of 31-Oct-2019

Largest Top Contributor^

JPMorgan Chase
By 0.23%
% of fund 3.01%

Largest Top Detractor^

Netflix
By -0.10%
% of fund 2.09%

^Absolute

Quarterly Data as of 30-Sep-2019

Top Purchase

Alcon
2.01%
Was (30-Jun-2019) 0.53%

Top Sale

Essity (E)
0.00%
Was (30-Jun-2019) 2.84%

Quarterly Data as of 30-Sep-2019

30-Sep-2019 - David J. Eiswert, Portfolio Manager,

As always, our trading activity during the quarter was mainly driven from the bottom up. The portfolio's sector and region allocations are primarily a result of individual stock considerations but are also influenced, to a lesser degree, by an assessment of macroeconomic and geopolitical considerations. That being said, we believe we are heading toward a macroeconomic crossroads, particularly regarding themes around the regulatory landscape for near-monopolistic technology companies and U.S.-China trade. As such, we have been attempting to position the portfolio in such a way that we can participate in any positive-resolution-driven rally (such as a trade deal) while dampening the negative effects of any deteriorating factors.

Sector-wise, our allocations to information technology increased, while consumer staples and communication services decreased. Regionally, our exposure to developed Europe increased, while our allocation to North America decreased.

Information Technology

We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. That being said, increasing regulatory scrutiny and concerns about privacy have been a cloud over the big internet companies in recent months, and we�have been�managing our position sizes in light of these risks. We look for innovative companies with the potential to be true market disruptors. The shifts toward greater connectivity, mobility, and use of cloud software applications are powerful long-term trends, and the markets for consumer and enterprise technology products are expanding in all regions. Rapid growth in the use of the internet, particularly in Asia, has yielded many compelling stories with long runways for growth. We also have a sizable exposure to semiconductor stocks that are trading at attractive valuations and should benefit from content growth in the automotive and industrial end markets as well as investment in data centers and artificial intelligence.

  • We initiated a position in Applied Materials, which provides materials engineering solutions in the production of semiconductor chips and advanced display. We think the company is extremely high quality and well positioned to benefit as Moore's Law continues to slow and innovation is driven by materials innovations, which is one of Applied Materials' strengths. The firm is also historically very profitable during cyclical downturns, has an attractive valuation, and we think the stock should rerate as DRAM and NAND prices begin to reaccelerate over the next few months.
  • We initiated a position in Advanced Micro Devices, a fabless digital semiconductor designer of both microprocessors and graphics processors. The company is small compared with competitors like Intel and NVIDIA, but in our opinion is poised to rapidly take market share given its recent product portfolio ramp-up and the acceleration of AI technology.
  • We eliminated our position in PayPal. The stock performed well for us for several years but pulled back recently amid intensifying competition in the digital payments space, and we have not seen signs of the level of innovation needed to battle such competition. Thus, we chose to exit our position.
  • We eliminated our position in Disco, which manufactures tools and consumables for the semiconductor, industrial, and construction industries. Although we continue to like Disco, we chose to swap shares for Hamamatsu Photonics where we have higher conviction and the risk/return profile is more attractive.

Consumer Discretionary

The consumer discretionary sector has become increasingly challenged as market disruption, driven in part by rapid changes in consumer behavior and e-commerce, has led to a more dramatic demarcation between winners and losers. The "winners" in the sector are becoming increasingly crowded investments, and, thus, it has become more difficult to find opportunities where we feel we have unique insights into improving returns. Given the polarized structure of the sector, our focus is on high-quality names that we think are on the right side of change and have dominant market positions. We find internet-based media and select retailing companies particularly attractive, but most of our holdings are driven by product-specific stories.

  • We defended several of our core Chinese internet-related names, including Ctrip.com International and Alibaba Group Holding, in prudent weights by adding to our positions as the stocks pulled back on broader macroeconomic worries. We have high conviction in these companies given their incredibly dominant market positions, huge end markets that are still underpenetrated and undermonetized, smart capital allocation, and rapid pace of innovation.
  • We initiated a position in Chinese hotel operator Huazhu. We think the company is the best and most efficient hotel operator in China and should drive accelerated earnings through market share gains and a better profit mix from more franchise models. The stock has underperformed recently due to a bottoming demand cycle, and we took the opportunity to start a position.
  • We eliminated our position in Farfetch, the leading global luxury digital marketplace. While the company reported strong revenue growth over the quarter, profitability remained weak, which spooked investors. With the firm's growth trajectory now more opaque, we chose to exit our position.

Consumer Staples

We feel many consumer staples companies are losing their traditional distribution strength due to the ongoing shift to e-commerce and social networking models. We also find the sector broadly expensive as investors have flocked to higher-yielding stocks in recent years. The ongoing disruption, coupled with stretched valuations, means that we see limited opportunities.

  • We eliminated our position in personal care and tissue manufacturer Essity. With our thesis largely played out, we chose to take profits and reallocate to higher-conviction names.

Health Care

Health care remains a fertile area for growth potential and accelerating technological discovery. Our focus is on companies that are key disrupters and innovators in the field, particularly in the medical technology and biopharma spaces as well as companies where we have particular insight into key drivers of their durable growth. We also favor names that we feel are durable grinders with less exposure to potential regulatory headwinds and changes in health care policy in the U.S., like Danaher and Alcon.

  • Abiomed is a medical device firm that develops and manufactures the Impella family of cardiac pumps. We initiated a position over the quarter as we think the company is capable of significant growth: It pioneered the Impella pump and operates in a very underpenetrated segment with no real competitors. We think Abiomed should see accelerating return on capital over the next few years as it continues to develop in key markets.
  • We eliminated our position in medical technology firm Becton, Dickinson and Company. The stock has produced strong performance in recent months, and we now believe our thesis has played out. We chose to exit our position and reallocate funds to names with greater upside potential.

Sectors

Total
Sectors
11
Largest Sector Information Technology 33.35% Was (30-Sep-2019) 30.73%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Materials
Net Contribution 0.58%
Sector
0.13%
Selection 0.46%

Top Detractor^

Communication Services
Net Contribution -0.74%
Sector
0.06%
Selection
-0.80%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Information Technology
By16.79%
Fund 33.35%
Indicative Benchmark 16.55%

Largest Underweight

Consumer Staples
By-6.91%
Fund 1.49%
Indicative Benchmark 8.39%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - David J. Eiswert, Portfolio Manager,
We are underweight consumer staples as we feel many companies in the sector are losing their traditional distribution strength due to the ongoing shift to e-commerce and social networking models. We also find the sector broadly expensive as investors have flocked to higher-yielding stocks in recent years. The ongoing disruption, coupled with stretched valuations, means that we see limited opportunities.

Countries

Total
Countries
19
Largest Country United States 50.68% Was (30-Sep-2019) 50.42%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

China
By3.13%
Fund 6.87%
Indicative Benchmark 3.74%

Largest Underweight

United States
By-4.63%
Fund 50.68%
Indicative Benchmark 55.30%

Monthly Data as of 31-Oct-2019

Currency

Total
Currencies
14
Largest Currency U.S. dollar 61.12% Was (30-Sep-2019) 62.09%
Other View complete Currency Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

U.S. dollar
By 4.30%
Fund 61.12%
Indicative Benchmark 56.82%

Largest Underweight

Canadian dollar
By -3.00%
Fund 0.00%
Indicative Benchmark 3.00%

Monthly Data as of 31-Oct-2019

Team (As of 31-Aug-2019)

David J. Eiswert

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Mr. Eiswert has 19 years of investment experience, 16 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst at Mellon Growth Advisors and Fidelity Management and Research. He also worked as a consultant in the communications industry.

Mr. Eiswert earned a B.A., summa cum laude, in economics and political science from St. Mary's College of Maryland and an M.A. in economics from the University of Maryland, College Park. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    19
Josh Nelson

Josh  Nelson is a director of research in the U.S. Equity Department of T. Rowe Price. Previously, he was an associate portfolio manager for the Global Focused Growth Equity Strategy. He is on the Investment Advisory Committee of the Global Stock Strategy. He also serves on the Equity Steering Committee. Mr. Nelson is a vice president of T. Rowe Price Group, Inc.

Mr. Nelson has 17 years of investment experience, two of which have been with T. Rowe Price. He served as a summer intern with T. Rowe Price in 2006, covering agricultural commodities and ethanol companies. Prior to joining the firm in 2007, he was an investment banker for Citigroup Global Markets, Inc. 

Mr. Nelson earned a B.S., with honors, in industrial systems and engineering from the University of Florida. He also earned an M.B.A., with honors, in finance from The Wharton School, University of Pennsylvania.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    17
Kurt A.  Umbarger

Kurt Umbarger is the regional head of the Equity Investment Specialist Group of T. Rowe Price. Previously, he was a global equity portfolio specialist in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Umbarger has 26 years of investment experience, all of which have been at T. Rowe Price. He joined the firm in 1992 and has been a portfolio specialist since 2001.  Prior to joining the global equity team in 2005, Mr. Umbarger worked with the international and emerging market equity teams. As a portfolio specialist, he has traveled the world, working closely with institutional clients, consultants, and prospects.

Mr. Umbarger earned a B.S. in finance from Towson University and an M.S.F. in finance from Loyola University Maryland. He also has earned the Chartered Financial Analyst designation and is a Series 6, 7, 63, and 65 registered representative.

  • Years at
    T. Rowe Price
    26
  • Years investment
    experience
    26
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    19

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $15,000 $100 $100 5.00% 160 basis points 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.81%
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92%

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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