SICAV

Global Growth Equity Fund

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

ISIN LU0438015033 Valoren 10367357

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

16.41%
$482.5m

1YR Return
(View Total Returns)

Manager Tenure

24.64%
11yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

1.17
5.18%

Inception Date 10-Jul-2009

Performance figures calculated in GBP

Other Literature

31-Aug-2020 - Scott Berg, Portfolio Manager,
While we have benefitted from being on the right side of many changes playing out during this highly unusual period, we are not being complacent about the need to stay active and think through the risks of a rotation or setback in the market. Much more positive market action and sentiment is underpinning the current backdrop, but increased uncertainty has made us more cautious of late, and we are moving the portfolio back to a more balanced posture.
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

Our medium- to long-term outlook for global equities remains optimistic. For our portfolio specifically, we see significant upside potential over the next two to three years for many of the names we own as we believe we are early in a new equity cycle. In a world of lower growth, lower interest rates, and low inflation, durable, growing, and successful businesses should continue to generate solid returns if the price paid is reasonable.

However, nearer term, our outlook is more mixed, and we are having to balance emerging and ongoing risks, which continue to make the month-to-month outlook hard to gauge. We are seeing accelerating spread of the coronavirus in parts of the U.S., and there are some fears of a potential second wave in China and other countries. The coronavirus outbreak has also exacerbated tensions between China and the U.S., with rhetoric giving way to actions being taken by both sides. We expect that elevated tensions between the two superpowers is likely the new normal, but this will ebb and flow in terms of how pointed and extreme the tensions get. Possible implications from the looming November U.S. election have created additional uncertainty, and societal pressures visible in both the emerging and developed world will need to be addressed now and on the other side of economic recovery.

While we have benefited from being on the right side of many changes playing out during this highly unusual period, we are not being complacent about the need to stay active and think through the risks of market rotation or market disappointment. Much more positive market action and sentiment envelopes the current backdrop, but increased uncertainty has made us more cautious of late, and we are moving the portfolio back to a more balanced posture. While the current environment is likely to remain complex, we are confident that our robust research platform and worldwide, fundamentals-driven investment process are well suited to navigate such challenging times.

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 | GBP)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 24.64% 16.41% 19.68% 15.21%
Indicative Benchmark % 5.98% 7.60% 13.31% 11.43%
Excess Return % 18.66% 8.81% 6.37% 3.78%

Inception Date 10-Jul-2009

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Aug-2020

Performance figures calculated in GBP

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 21.28% 15.96% 17.41% 14.64%
Indicative Benchmark % 5.18% 7.92% 11.72% 11.26%
Excess Return % 16.10% 8.04% 5.69% 3.38%

Inception Date 10-Jul-2009

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Jun-2020

Performance figures calculated in GBP

Recent Performance

  Month to DateData as of 25-Sep-2020 Quarter to DateData as of 25-Sep-2020 Year to DateData as of 25-Sep-2020 1 MonthData as of 31-Aug-2020 3 MonthsData as of 31-Aug-2020
Fund % -0.85% 4.57% 22.23% 4.63% 11.28%
Indicative Benchmark % 0.14% 3.25% 3.78% 4.02% 6.46%
Excess Return % -0.99% 1.32% 18.45% 0.61% 4.82%

Inception Date 10-Jul-2009

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country World Index Net

Performance figures calculated in GBP

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-Aug-2020 - Scott Berg, Portfolio Manager,
Global equities produced robust returns in August amid continued accommodative central bank policies, positive news surrounding the coronavirus pandemic, and a stronger-than-expected corporate earnings season. Within the portfolio, stock selection in the industrials and business services sector held back relative returns the most. Shares of multi-industrial Roper Technologies fell modestly on news that it would be acquiring Vertafore, a property and casualty insurance software company. While the response was generally positive and the stock initially spiked on the news, the company gave back gains by the end of the month as investors appeared to have concerns about the size and expense of the deal. We remain in favour of the deal and think it fits into Roper’s framework of acquiring durable, asset-light, high-margin businesses. Conversely, an overweight position in the consumer discretionary sector, coupled with positive stock selection, contributed the most to relative performance. Shares of European online retailer ASOS spiked after the company revised full-year guidance up dramatically. With its solid fashion positioning, attractive own brand offering, technological innovation, and leading service proposition, we view ASOS as a truly differentiated, high-quality business. We believe it should emerge from the pandemic as a market share gainer as e-commerce gains momentum.

Holdings

Total
Holdings
172
Largest Holding Amazon.com 3.62% Was (31-Mar-2020) 3.31%
Other View Full Holdings Quarterly data as of 30-Jun-2020
Top 10 Holdings 17.86% View Top 10 Holdings Monthly data as of 31-Aug-2020

Largest Top Contributor^

Amazon.com
By 1.60%
% of fund 3.64%

Largest Top Detractor^

Wells Fargo
By -0.08%
% of fund 1.05%

^Absolute

Quarterly Data as of 30-Jun-2020

Top Purchase

Colgate-Palmolive (N)
0.89%
Was (31-Mar-2020) 0.00%

Top Sale

Cadence Design Systems (E)
0.00%
Was (31-Mar-2020) 0.61%

Quarterly Data as of 30-Jun-2020

30-Jun-2020 - Scott Berg, Portfolio Manager,

The portfolio remains largely sector neutral. We were presented with a bigger change in fundamental data points and with wildly different valuation data points at different times during the quarter, which resulted in higher turnover than normal. Given the striking volatility and massive dislocations we experienced at various times, we would expect to see more trading as we take advantage of anomalies. We are becoming more cautious, but not defensive, as we move back to a much more balanced posture.

Sector-wise, we are overweight consumer discretionary and financials, and these are also areas that we added meaningfully to over the period. We reduced our exposure to health care and information technology, areas that performed well of late. From a regional perspective, our emerging markets weighting has come down as we trimmed some of our Chinese names and the negative impact from currency moves hurt Indian and Indonesian stocks. Within emerging markets, we continue to have a favorable medium-term outlook for the structural growth prospects in India, Indonesia, the Philippines, Peru, and Vietnam.

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. Given the polarized structure of the sector, our focus is on high-quality names that are on the right side of change and have dominant market positions. Our holdings are tilted toward online and e-commerce.

  • We initiated a position in Shop Apotheke a disruptive online pharmacy currently focusing on the German market. We think the company is a well-run e-commerce business with a strong position in a large and structurally growing addressable market with low online penetration. The coronavirus pandemic has accelerated the already-growing demand for online pharmacy services, and we believe Shop Apotheke is the best positioned to benefit given its market-leading position in Germany and strong customer proposition, which should allow the company to expand to other markets.
  • We trimmed our position in European online apparel retailer Zalando on strength following strong earnings results in May. We have high conviction in Zalando given the firm's dominant position in the European online fashion segment, with substantial advantages over peers in terms of scale, distribution network, brand relationships, consumer traffic, technology, operational efficiency, and strategy.

Financials

With leading central banks having cut rates and ramped up quantitative easing measures to help counteract the negative economic impact from the coronavirus, we think we have been in a lower rate environment for longer than we had anticipated. While we remain underweight developed market banks due to the challenging rate environment, we have found idiosyncratic ideas in the U.S., Europe, and Canada to add to the portfolio. Our bets within the sector are largely concentrated in capital markets names and emerging markets banks. We also have exposure to high-quality insurance companies that were trading at extremely attractive valuations.

  • We initiated a position in MetLife, a high-quality, diversified insurance company with strong market positions in many countries and regions. While the firm faces headwinds due to slowing demand and business activity and lower interest rates, MetLife has a top-notch management team with a strong balance sheet that is well positioned to weather the storm and can continue to deliver solid earnings growth over the long term. The stock also has an attractive dividend yield, which is even more meaningful in a low interest rate environment.
  • We eliminated our position in MarketAxess Holdings. The electronic trading platform has performed well in recent months, so we chose to reallocate to names with greater upside potential.

Industrials and Business Services

Within the sector, the coronavirus outbreak has had the biggest negative impact on the airline industry. The recent crude oil price decline along with assumed capacity cut-driven consumption provide a great buffer, but the industry is likely to experience a dramatic decline in revenues in the near to intermediate term. When it comes to the sector broadly, we are taking a long-term approach with our investments in the space and remain focused on high-quality companies that can benefit from multiyear growth trends and increases in global trade and capital spending. We are attracted to less cyclical, durable earnings growers in industries with attractive growth dynamics and are largely avoiding companies with commodity capital expenditures exposure.

  • We eliminated our positions in Airbus and Boeing. Demand in the aerospace industry has experienced severe contraction since the coronavirus pandemic began, and we think this will persist for some time. As airlines delay and cancel fleet replacement, airplane manufacturers like Airbus and Boeing that are mostly dependent on new fleet orders face a challenging landscape in both the near and long terms.
  • We initiated a position in security lock product-maker Assa Abloy. This is a name we have owned in the past for its durable, high-single-digit revenue growth driven by the secular shift to electromechanical locks. In the short term, we think the company represents a solid cyclical growth opportunity as global purchasing managers' indexes recover and demand picks up. We are also impressed by the firm's best-in-class management team and strong free cash flow generation while operating in an industry with high barriers to entry. The stock had pulled back in recent months on industrial weakness due to the coronavirus, creating an attractive entry point.

Materials

The coronavirus-induced economic downturn has, not surprisingly, had a negative impact on the materials sector. Historically, the time to increase exposure to materials is during a recession, and we have added several high-quality names that are currently out of favor. Our focus is mainly on high-quality companies that offer particularly attractive valuations and are more highly correlated to staples-like industries and secular growth trends, but we also have exposure to metals and mining companies as well.

  • We bought shares of Symrise, a German company that develops flavors, fragrances, and cosmetic ingredients. This is a name we have owned in the past, and we think Symrise offers a staples-like stable and durable growth with attractive end markets, strong management, and margin improvement due to better product mix from growth in higher-margin segments such as pet food and probiotics.
  • We initiated a position in International Paper, which produces and distributes paper products, including containerboard, printing and writing papers, pulp, and packaging products. While the stock has pulled back due to the coronavirus, in contrast to past economic slowdowns, demand should be somewhat buoyed by e-commerce packaging and consumer demand for household paper products. Overall, we think the company is well run, has a solid balance sheet and dividend, and should see earnings reaccelerate off of what we believe is a bottoming cycle as we move through the coronavirus pandemic and economic activity comes back online.

Sectors

Total
Sectors
11
Largest Sector Information Technology 21.92% Was (31-Jul-2020) 21.39%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Information Technology
Net Contribution 3.70%
Sector
0.30%
Selection 3.40%

Top Detractor

N/A

^Relative

Quarterly Data as of 30-Jun-2020

Largest Overweight

Consumer Discretionary
By4.95%
Fund 17.80%
Indicative Benchmark 12.85%

Largest Underweight

Energy
By-2.21%
Fund 0.92%
Indicative Benchmark 3.13%

Monthly Data as of 31-Aug-2020

31-Aug-2020 - Scott Berg, Portfolio Manager,
The consumer discretionary sector is facing increasingly challenges as market disruption, driven in part by rapid changes in consumer behaviour and e-commerce, has led to a more dramatic demarcation between the winners and losers. Given the polarised structure of the sector, our focus is on high-quality companies that are on the right side of change and have dominant market positions. Our holdings are tilted toward online and e-commerce.

Countries

Total
Countries
25
Largest Country United States 53.32% Was (31-Jul-2020) 50.90%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

Germany
By3.86%
Fund 6.41%
Indicative Benchmark 2.55%

Largest Underweight

United States
By-5.16%
Fund 53.32%
Indicative Benchmark 58.47%

Monthly Data as of 31-Aug-2020

Currency

Total
Currencies
20
Largest Currency U.S. dollar 64.41% Was (31-Jul-2020) 61.62%
Other View complete Currency Diversification

Monthly Data as of 31-Aug-2020

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

U.S. dollar
By 3.80%
Fund 64.41%
Indicative Benchmark 60.61%

Largest Underweight

Japanese yen
By -5.12%
Fund 1.52%
Indicative Benchmark 6.63%

Monthly Data as of 31-Aug-2020

Team (As of 05-Aug-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
    2009
  • Years at
    T. Rowe Price
    18
  • Years investment
    experience
    18
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
    10
  • Years investment
    experience
    13
Samuel Ruiz

Samuel Ruiz is a portfolio specialist in the Equity Division. He is a vice president of T. Rowe Price Australia Limited. 

Sam’s investment experience began in 2008, and he has been with T. Rowe Price since 2020, beginning as an associate working with the Global Equity and Australia Equity Strategies in the Equity Division. Prior to this, Sam was employed by Macquarie Investment Management in the area of strategy in the Equities Division. 

Sam earned a bachelor of applied finance degree from the University of South Australia.

  • Years at
    T. Rowe Price
    <1 year
  • Years investment
    experience
    0
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 (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 0.81%
Class Q $1,000 $100 $100 0.00% 75 basis points 0.92%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.06%

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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