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SICAV

Global Growth Equity Fund

Seeking to select superior stocks from the broadest global equity opportunity set.

ISIN LU0382933116 Valoren 4775318

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

17.41%
$500.4m

1YR Return
(View Total Returns)

Manager Tenure

30.40%
11yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.60
4.19%

Inception Date 27-Oct-2008

Performance figures calculated in USD

Other Literature

31-Dec-2019 - Scott Berg, Portfolio Manager,
The big question marks for equity investors as we enter 2020 relate to U.S.-China trade negotiations and November’s U.S. elections. In our view, it is difficult to envision a sharp runup in equity markets until we see meaningful progress in the former and more clarity in the latter—neither of which are likely until very late into 2020. This complex backdrop should however provide ample opportunity for active investors to take advantage of valuations anomalies.
R. Scott Berg
R. Scott Berg, Lead Portfolio Manager

Scott Berg is the portfolio manager for the T. Rowe Price Global Growth Equity Strategy and a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Equity markets were resilient throughout the latter part of 2019 despite continuing geopolitical uncertainty and general economic blas�. However, several positive developments on the macro front that occurred in December served to support equity markets. The U.S. and China agreed to the first phase of a trade deal, the Conservative party celebrated a resounding win in the UK general election, seemingly ensuring a final resolution of the Brexit debacle, and Democrats and Republicans were able to settle on a budget agreement in the midst of impeachment hearings, which avoids a government shutdown in January. In total, we do not view these events as meaningful positives for equity markets, but they resulted in the avoidance of meaningful negatives.

Importantly for equity markets, key central banks changed direction in 2019, cutting interest rates and reviving or expanding quantitative easing programs. Assuming the economy does not lurch in either direction in a meaningful way, we think it is unlikely that the U.S. Federal Reserve will do much leading up to the November elections. However, we do expect that global monetary policy will remain supportive as the European Central Bank and the Bank of Japan continue their quantitative easing programs, and that will be good for equity markets.

Valuations are at the upper end of normal from a price-to-earnings perspective but through the lens of dividend/bond yields, equities still appear attractive in our opinion. We expect we will see a modest re-acceleration in corporate earnings growth following a tepid 2019. We continue to like the names we own from the bottom up in terms of their growth outlooks and valuations over a multiyear timeframe and are still largely playing it down the "middle of the fairway" with the portfolio. However, with the catalysts of the market being a bit more supportive, we have let the beta of the portfolio drift modestly higher.

The big question marks for equity investors as we enter 2020 relate to U.S.-China trade and November's U.S. elections. In our view, it is difficult to envision a sharp runup in equity markets until we see meaningful progress toward a real, constructive second phase trade agreement between the two superpowers and more clarity around the U.S. elections-neither of which are likely until very late into 2020. Overall, the environment is likely to remain complex, but this should provide ample opportunity for active investors to take advantage of valuations anomalies.

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 companies 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 large-cap stocks, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: Typically around 130 holdings.
  • Individual positions: Typically 0.3%-3.0%, maximum 5%
  • Emerging markets exposure: +/- 15% of benchmark
  • Broad sector ranges: +/- 10% of benchmark
  • Country ranges: +/- 10% of benchmark (USA is +/- 20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%
  • Expected tracking error: 300 to 700 basis points

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 30.40% 17.41% 10.91% 10.47% 15.27%
Indicative Benchmark % 26.60% 12.44% 8.41% 8.79% 11.86%
Excess Return % 3.80% 4.97% 2.50% 1.68% 3.41%

Inception Date 27-Oct-2008

Manager Inception Date 27-Oct-2008

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Dec-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 30.40% 17.41% 10.91% 10.47%
Indicative Benchmark % 26.60% 12.44% 8.41% 8.79%
Excess Return % 3.80% 4.97% 2.50% 1.68%

Inception Date 27-Oct-2008

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Dec-2019

Performance figures calculated in USD

Recent Performance

  Month to Date Quarter to Date Year to Date 1 MonthData as of 31-Dec-2019 3 MonthsData as of 31-Dec-2019
Fund % N/A N/A N/A 2.81% 9.11%
Indicative Benchmark % N/A N/A N/A 3.52% 8.95%
Excess Return % N/A N/A N/A -0.71% 0.16%

Inception Date 27-Oct-2008

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-Dec-2019 - Scott Berg, Portfolio Manager,
Global equities gained ground in December. Investor optimism pushed markets higher as developments in U.S.-China trade negotiations and the UK election helped remove a level of uncertainty that had persisted throughout the year. At the portfolio level, information technology held back relative returns the most. Shares of cloud-based software provider Workday struggled after the company provided guidance for FY 2021 subscription revenue growth that was lighter than expected. Despite the disappointing guidance, third-quarter earnings were generally strong and highlighted robust revenue and gross margin fundamentals as well as lower operating expense growth. Workday is a high-quality business that is targeting very large and complex end markets that should support durable growth. On the positive side, stock selection in the consumer discretionary sector aided relative performance. Shares of Tesla rallied on news of positive improvements in deliveries and the firm’s factory in China. We believe Tesla is a highly differentiated innovator that will continue to disrupt the automobile industry. The upcoming release of the Model Y, its Chinese production facility, and improving scale and financial discipline should enable Tesla to continue to gain market share in the automobile industry.

Holdings

Total
Holdings
160
Largest Holding Alphabet Class C 2.75% Was (30-Sep-2019) 2.85%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 17.84% View Top 10 Holdings Monthly data as of 31-Dec-2019

Largest Top Contributor^

Alphabet
By 0.37%
% of fund 2.74%

Largest Top Detractor^

Boeing
By -0.05%
% of fund 0.66%

^Absolute

Quarterly Data as of 31-Dec-2019

Top Purchase

Apple
1.47%
Was (30-Sep-2019) 0.78%

Top Sale

Boeing
0.66%
Was (30-Sep-2019) 1.35%

Quarterly Data as of 31-Dec-2019

31-Dec-2019 - Scott Berg, Portfolio Manager,

As always, our trading activity during the quarter was driven from the bottom up. The portfolio's sector and region allocations are driven primarily by individual stock considerations but are also influenced, to a lesser degree, by an assessment of macroeconomic and geopolitical considerations. We are monitoring global interest rates, U.S.-China trade, and a variety of macro events that influence the equity risk premiums globally of the securities that we own. Although we expect a modest uptick in growth moving into 2020, we continue to play it 'down the middle of the fairway' with the portfolio given the ongoing tug of different forces. We are still largely sector neutral but have concentrated some of our weightings at the margin, with meaningful overweights in consumer discretionary and information technology and underweights in energy and financials.

Over the quarter, our allocations to information technology and consumer discretionary increased, while exposure decreased in consumer staples. Regionally, our allocation to North America increased, while exposure to Pacific ex-Japan decreased. Within emerging markets, we continue to favor what we consider the more fertile and demographically advantaged regions, such as India, Indonesia, the Philippines, Peru, and Vietnam. Our exposure to China is very purposeful in areas such as artificial intelligence and health care that we think offer long-term growth potential.

Consumer Discretionary

Our holdings in consumer discretionary are diversified across industries and geographies. However, many of our holdings have a strong presence in online retail and/or exposure to emerging markets with attractive demographics.

  • We initiated a position in casino operator Las Vegas Sands. We think the company has one of the best and most diversified portfolios of assets in the gaming industry as well as an attractive dividend yield and solid balance sheet.

Information Technology

We continue to believe that the pace of structural growth and innovation within the sector remains strong. Advancements in areas like artificial intelligence (AI) and enterprise software are not only affecting technology companies, but also reshaping more traditional industries once viewed as less susceptible to business model disruption. We remain positioned to benefit from increasing AI adoption and application as well as the ongoing transition toward greater computing mobility, increasing use of the Web, and growing technology consumption in emerging markets. As a result, our holdings are tilted toward payment and cloud software companies.

  • We initiated a position in Zoom Video, a software-as-a-service company focused on providing video conferencing solutions to businesses. We think Zoom Video has an outstanding product with better technology than competitors that can address a widespread pain point (unreliable video conferencing from work and home). Given the sizable addressable market and superior technology, we think Zoom Video is capable of significant growth over the long term.
  • We started a position in Paycom Software, which provides cloud-based, payroll/human capital management solutions to mid-level companies. We think Paycom is capable of strong, long-term growth given its strong and growing market position and high-quality product offering.

Consumer Staples

Given our view that we remain in a lower growth environment, we find that high-quality consumer staples names with real, growing businesses that pay a decent dividend offer compelling opportunities. Our holdings in this area remain tilted toward companies that hold significant market share and benefit from demand growth in emerging markets.

  • We eliminated our position in Clorox. While we still believe Clorox is a high-quality company, recent challenges in some segments like trash bags have weighed on earnings. Valuation is also stretched, in our view, so we chose to exit our position in favor of higher conviction names.
  • We moved on from our position in Colgate-Palmolive. Lackluster earnings results of late and a rich valuation have lowered our conviction, and we chose to reallocate funds to names with more attractive risk-reward profiles.

Financials

Our holdings in this area are broadly diversified, but we retain a focus on commercial banks in fertile emerging market economies and high-quality U.S. banks and U.S. capital markets companies with global exposure. We scaled back some of our positions in India but still have strong longer-term conviction in the private banks we own due to their regulatory advantages over state-owned banks and better balance sheets and management teams. Additionally, the country's real GDP growth, normal interest rates, and low debt levels are attractive from an investment standpoint, especially compared with the developed world.

  • We eliminated our position in discount broker TD Ameritrade. The stock spiked on news that it would be acquired by Charles Schwab. With limited remaining upside, we chose to exit our position.
  • We eliminated our position in Citigroup. With the stock having reached fair value, in our view, we chose to exit our position and reallocate to names where we have higher conviction, like Goldman Sachs.
  • We initiated a position in investment banking juggernaut Goldman Sachs. Under new CEO David Solomon, the company is attempting to undergo a significant transformation that involves restructuring and diversifying their business model and enhancing their technological capabilities in order to create an elite consumer experience. We find the company's new vision compelling and believe Goldman Sachs represents an attractive durable growth opportunity.

Sectors

Total
Sectors
11
Largest Sector Information Technology 21.14% Was (30-Nov-2019) 20.40%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Consumer Discretionary
Net Contribution 1.28%
Sector
-0.03%
Selection 1.32%

Top Detractor^

Consumer Staples
Net Contribution -0.69%
Sector
-0.06%
Selection
-0.64%

^Relative

Quarterly Data as of 31-Dec-2019

Largest Overweight

Consumer Discretionary
By5.06%
Fund 15.82%
Indicative Benchmark 10.76%

Largest Underweight

Energy
By-3.63%
Fund 1.60%
Indicative Benchmark 5.23%

Monthly Data as of 31-Dec-2019

31-Dec-2019 - Scott Berg, Portfolio Manager,
We are overweight the consumer discretionary sector. Our holdings are diversified across industries and geographies. However, many of our holdings have a strong presence in online retail and/or exposure to emerging markets with attractive demographics. In contrast, our outlook for the energy sector remains subdued given the global oversupply of oil. While escalating tensions in the Middle East are complicating factors, we expect the surge in U.S. shale oil production and productivity will continue to drive oversupply for some time to come. Our focus in the sector is on companies with high-quality balance sheets, low-cost production, and better production growth profiles.

Countries

Total
Countries
28
Largest Country United States 48.04% Was (30-Nov-2019) 47.90%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

India
By4.57%
Fund 5.62%
Indicative Benchmark 1.05%

Largest Underweight

United States
By-7.36%
Fund 48.04%
Indicative Benchmark 55.40%

Monthly Data as of 31-Dec-2019

Currency

Total
Currencies
21
Largest Currency U.S. dollar 59.68% Was (30-Nov-2019) 59.54%
Other View complete Currency Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

Indian rupee
By 4.54%
Fund 5.60%
Indicative Benchmark 1.05%

Largest Underweight

Japanese yen
By -5.94%
Fund 1.23%
Indicative Benchmark 7.17%

Monthly Data as of 31-Dec-2019

Team (As of 06-Jan-2020)

R. Scott Berg

Scott Berg is the portfolio manager for the T. Rowe Price Global Growth Equity Strategy and a vice president of T. Rowe Price Group, Inc.

Mr. Berg has 17 years of investment experience, all of which have been with T. Rowe Price. He joined the firm in 2002 as a research analyst covering the business services sector after serving as a summer intern in 2001. In 2005, he joined the global equity team as an associate portfolio manager and in 2008 launched the Global Growth Equity Strategy. Prior to T. Rowe Price, he was the manager of financial analysis and planning for Mead Consumer and Office Products. Previously, Mr. Berg was also employed by McKinsey & Company as a business analyst and was a core team member on the firm's global growth initiative.

Mr. Berg graduated first in his class from Macquarie University in Australia, with a B.Ec. in actuarial studies and finance. He also holds an M.B.A. from the Stanford Graduate School of Business, where he again graduated at the top of his class. Mr. Berg has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2008
  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    17
Harishankar Balkrishna

Hari Balkrishna is an associate portfolio manager for the Global Growth Equity Strategy in the Equity Division of T. Rowe Price. Mr. Balkrishna is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Balkrishna has 12 years of investment experience. He completed an internship at T. Rowe Price in 2009. Prior to joining the firm in 2010, he worked at Goldman Sachs, Sydney, Australia, in the financial institutions group of the Investment Banking Division.

Mr. Balkrishna has a bachelor of commerce in finance and accounting (university medal and first-class honours) from the University of New South Wales and also has earned an M.B.A., with distinction, from Harvard Business School.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    9
  • Years investment
    experience
    12
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
    27
  • Years investment
    experience
    27
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
    11
  • Years investment
    experience
    20

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 0.82%
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.07%

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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