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SICAV

US Blue Chip Equity Fund

Seeking superior returns from high quality US companies.

ISIN LU0133088293 Valoren 1274291

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

21.38%
$1.0b

1YR Return
(View Total Returns)

Manager Tenure

29.77%
4yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

0.98
6.96%

Inception Date 04-May-2015

Performance figures calculated in USD

Other Literature

30-Nov-2019 - Larry J. Puglia, Portfolio Manager,
Overall, we think heightened uncertainty may contribute to stock market volatility throughout the remainder of this year—and likely into next year—as investors seeks clarity on key issues, including the U.S. China trade situation and global monetary policy. Furthermore, as the U.S. presidential election campaigns gain momentum and controversial policy issues are debated, political headline risk may become more of a concern.
Larry Puglia
Larry Puglia, Lead Portfolio Manager

Larry J. Puglia is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is president of the Investment Advisory Committee of the US Large-Cap Core Growth Equity Strategy. He has been managing the US Large-Cap Core Growth Equity Strategy since 1993 and has had lead responsibility for all institutional accounts and other investment products within the strategy since 1997. Mr. Puglia is a vice president of T. Rowe Price Group, Inc.

 

Strategy

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 large and medium sized “blue chip” companies in the United States.

Investment Approach

  • Identify high-quality companies with leading market positions in fertile growth fields. Integrate fundamental research — emphasize sustainable growth, not momentum growth.
  • Focus on high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments.
  • Avoid overpaying for growth, while broadly diversifying portfolios, to manage portfolio risk.

Portfolio Construction

  • Typically 100-140 stock portfolio
  • Active position sizes typically range +/- 3.00% relative to S&P 500 Index
  • Sector weights vary from 0.5X to 2.0X for primary sectors relative to S&P 500 Index

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 29.77% 21.38% N/A 14.54%
Indicative Benchmark % 30.70% 14.59% N/A 11.12%
Excess Return % -0.93% 6.79% N/A 3.42%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

Data as of  31-Dec-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 29.77% 21.38% N/A 14.54%
Indicative Benchmark % 30.70% 14.59% N/A 11.12%
Excess Return % -0.93% 6.79% N/A 3.42%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

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 1.84% 9.54%
Indicative Benchmark % N/A N/A N/A 2.97% 8.91%
Excess Return % N/A N/A N/A -1.13% 0.63%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

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 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.

30-Nov-2019 - Larry J. Puglia, Portfolio Manager,
Major U.S. stock indices recorded solid gains in November, as hopes for a “phase one” trade deal between the U.S. and China helped the major benchmarks advance throughout much of the month. Within the portfolio, the information technology (IT) sector contributed to relative results due to both effective stock selection and a beneficial overweight position. Within the sector, shares of cloud software provider ServiceNow climbed higher after it was added to the S&P 500 Index, a move that is expected to expand the company’s shareholder base to include investors in passively managed index funds. In our view, ServiceNow's highly scalable, customisable, and easy-to-use cloud-based ticketing platform for managing IT service requests should continue to take market share. Our beneficial underweight positions in the utilities, consumer staples, and real estate sectors also aided relative performance. We maintain significant below-benchmark holdings in all three sectors given their relatively low long-term growth prospects. No sectors held back relative results during the month.

Holdings

Total
Holdings
122
Largest Holding Amazon.com 8.83% Was (30-Sep-2019) 8.94%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 45.44% View Top 10 Holdings Monthly data as of 31-Dec-2019

Largest Top Contributor^

Amazon.com
By 2.29%
% of fund 8.81%

Largest Top Detractor^

Boeing
By -0.48%
% of fund 2.22%

^Absolute

Quarterly Data as of 31-Dec-2019

Top Purchase

Apple
2.58%
Was (30-Sep-2019) 0.16%

Top Sale

Boeing
2.22%
Was (30-Sep-2019) 4.00%

Quarterly Data as of 31-Dec-2019

30-Sep-2019 - Larry J. Puglia, Portfolio Manager,

We continue to favor many of our high-conviction holdings in the information technology and consumer discretionary sectors, where valuations still look relatively compelling given the trajectories of the underlying businesses.

Information Technology

Within the information technology sector, we focus on innovative business models that can take advantage of transformational change. We favor companies with durable businesses that address large and growing markets, including electronic payment processing and public cloud computing services.

  • NVIDIA is the leading designer of graphics processing units in its industry. We bought shares during the quarter as we believe NVIDIA is a high-quality company with increasing leverage to several up-and-coming secular growth markets, including artificial intelligence, supercomputing, and autonomous driving.
  • We pared our position in VMware after management delivered disappointing guidance, primarily due to an increasingly uncertain information technology spending environment. The company announced acquisitions of Pivotal, a container technology firm, and Carbon Black, an endpoint security provider, contributed to the uncertainty and raised questions about the health of VMware's core business. We sold shares to moderate our positions size; however, over the long term, we expect VMware to gain market share as its new products become more widely adopted within its installed base.

Consumer Discretionary

We remain optimistic about stock-specific opportunities within the consumer discretionary sector. We favor businesses benefiting from the secular shift of consumer spending to online products and services. We believe industries such as physical retail and traditional media are secularly challenged; therefore, we plan to continue emphasizing companies within the sector that we think are on the right side of change and disruption.

  • We added shares of Alibaba Group Holding during the quarter. While trade tensions are a near-term overhang on the stock, we remain constructive on the long-term fundamentals and expect the Chinese internet giant's investments in its cloud business and offline retail to pay off by expanding the company's total addressable market. Moreover, the company's rich data on user behavior across its different services also create ample opportunity for monetization, while its leadership in online retail offers exposure to rising household incomes in China and other emerging markets.
  • We trimmed the portfolio's position in Marriott as fears of a global economic slowdown suppressed the returns of several hotel and leisure brands. Overall, we continue to like Marriott as it is the largest operator in an industry where scale is beneficial and long-term secular tailwinds exist.

Health Care

Our allocation to the health care sector is composed of select therapeutics and medical device companies that we believe have limited exposure to potential regulatory pressures. We are also emphasizing managed care companies positioned to benefit from industry consolidation as well as the increasing focus on providing cost-effective solutions.

  • We added to our position in Vertex Pharmaceuticals. In our view, the commercial-stage biotech company remains well positioned to sustain and expand its dominant leadership position in cystic fibrosis and is working on a number of other combinations that offer either improved efficacy over current treatments or applicability to a wider cross-section of cystic fibrosis patients.
  • Shares of UnitedHealth Group continued to fall due in large part to the political climate surrounding a proposed "Medicare for All" plan. We sold shares during the quarter to reduce our position size; however, we continue to like UnitedHealth Group as we think it is well diversified and should see accelerated earnings growth as a result of improving Medicare performance and continued growth in its Medicaid business. Furthermore, we feel a single-payer health care system is extremely unlikely, but we also recognize the meaningful shift in sentiment around stocks in the managed care industry, as well as the reality that political rhetoric is only likely to intensify as the 2020 U.S. presidential election approaches.

Sectors

Total
Sectors
11
Largest Sector Information Technology 33.52% Was (30-Nov-2019) 32.85%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: S&P 500 Index

Top Contributor^

Communication Services
Net Contribution 0.63%
Sector
-0.04%
Selection 0.66%

Top Detractor^

Information Technology
Net Contribution -0.76%
Sector
0.50%
Selection
-1.26%

^Relative

Quarterly Data as of 31-Dec-2019

Largest Overweight

Consumer Discretionary
By11.32%
Fund 21.08%
Indicative Benchmark 9.75%

Largest Underweight

Financials
By-8.50%
Fund 4.46%
Indicative Benchmark 12.95%

Monthly Data as of 31-Dec-2019

30-Nov-2019 - Larry J. Puglia, Portfolio Manager,
We remain optimistic about stock-specific opportunities within the consumer discretionary sector. We favour businesses benefitting from the secular shift of consumer spending to online products and services. We believe industries such as physical retail and traditional media are facing secular challenges; therefore, we plan to continue to focus on companies within the sector that we think are on the right side of change and disruption.

Team (As of 06-Jan-2020)

Larry Puglia

Larry J. Puglia is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is president of the Investment Advisory Committee of the US Large-Cap Core Growth Equity Strategy. He has been managing the US Large-Cap Core Growth Equity Strategy since 1993 and has had lead responsibility for all institutional accounts and other investment products within the strategy since 1997. Mr. Puglia is a vice president of T. Rowe Price Group, Inc.

Mr. Puglia has 30 years of investment experience, 29 of which have been with T. Rowe Price. He joined the firm in 1990 as an investment analyst specializing in financial services stocks. His coverage included banking, consumer finance, brokerage, investment management, and diversified financial companies. Mr. Puglia also served as an investment analyst covering the pharmaceutical industry. He began his career at Peat Marwick Main & Co. in 1982, ultimately serving as a senior manager.

Mr. Puglia earned a B.B.A., summa cum laude, in accounting from the University of Notre Dame and an M.B.A. in finance from the University of Virginia, Darden School of Business, where he was named a Shermet Scholar. He has earned the Chartered Financial Analyst designation and is a certified public accountant.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    29
  • Years investment
    experience
    30
Craig Watson

Craig Watson is a portfolio specialist in the Equity Division of T. Rowe Price. He is a member of the U.S. Large-Cap Growth team working closely with institutional clients, consultants, and prospects. Mr. Watson is a vice president of T. Rowe Price Group, Inc.

Mr. Watson has 24 years of investment experience. Prior to joining the firm in 2007, he was senior vice president of global equity sales for HSBC Securities. Mr. Watson also was employed by UBS as director of institutional equity sales.

Mr. Watson earned a B.S., magna cum laude, in accounting from Hampton University and an M.B.A. from The Wharton School, University of Pennsylvania. He also has earned the certified public accountant accreditation.

  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    24

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% 150 basis points 1.61%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.72%
Class J $10,000,000 $0 $0 0.00% 0 basis points 0.03%
Class Q $15,000 $100 $100 0.00% 65 basis points 0.76%

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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