Download

Audience for the document: Share Class: Language of the document:

Download

Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest

T. Rowe Price

Please enter valid search characters

SICAV

Asian ex-Japan Equity Fund

A diversified fund, with a focus on sustainable growth.

ISIN LU0266341725 WKN A0MKKA

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

14.40%
$1.3b

1YR Return
(View Total Returns)

Manager Tenure

51.29%
12yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.63
3.36%

Inception Date 13-Dec-2006

Performance figures calculated in USD

31-Mar-2021 - Anh Lu, Portfolio Manager,
We believe that overall, the prospects for economic and corporate profit growth in Asia-ex Japan have improved as progress in vaccine rollouts have raised the likelihood of economies reopening. Some investors are worried about inflation; while we do not hold strong views about the direction of the macroeconomy, we believe that inflationary risks may be offset by our search for companies with strong fundamentals and good earnings visibility, high-quality businesses where multiples are not too stretched.
Anh Lu
Anh Lu, Portfolio Manager

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

 

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 companies in Asia (excluding Japan).

Investment Approach

  • Employ fundamental analysis to identify companies with sustainable above-market earnings growth rates.
  • Focus on franchise strength, management team quality, free cash flow, and financing/balance sheet structure.
  • Verify relative valuation appeal versus both local market and region.
  • Apply negative screening for macroeconomic and political factors to temper bottom-up enthusiasm for specific securities.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

Portfolio Construction

  • 80-120 stock portfolio
  • Individual positions typically range from 0.40% to 5.00% - average position size of 1.00%
  • Country and sector weightings a residual of stock selection. Significant deviations expected.
  • Reserves range from 0% to 10%, but typically less than 5%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 51.29% 14.40% 16.47% 8.11% 11.35%
Indicative Benchmark % 47.95% 9.51% 14.55% 6.52% 9.61%
Excess Return % 3.34% 4.89% 1.92% 1.59% 1.74%

Inception Date 13-Dec-2006

Manager Inception Date 31-May-2009

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 30-Apr-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 63.55% 13.50% 15.92% 8.46%
Indicative Benchmark % 57.31% 8.88% 13.79% 6.66%
Excess Return % 6.24% 4.62% 2.13% 1.80%

Inception Date 13-Dec-2006

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 31-Mar-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 12-May-2021 Quarter to DateData as of 12-May-2021 Year to DateData as of 12-May-2021 1 MonthData as of 30-Apr-2021 3 MonthsData as of 30-Apr-2021
Fund % -4.20% -2.36% 2.27% 1.91% 1.86%
Indicative Benchmark % -3.38% -0.99% 1.69% 2.48% 1.12%
Excess Return % -0.82% -1.37% 0.58% -0.57% 0.74%

Inception Date 13-Dec-2006

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Indicative Benchmark: MSCI All Country Asia ex Japan 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.

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-Mar-2021 - Anh Lu, Portfolio Manager,
Asia ex-Japan equities fell in March and lagged their developed market counterparts amid fears over the prospect of higher inflation. China led the declines but within the portfolio, stock selection in the country boosted returns the most. For example, Greentown, a property management company, added value after reporting better-than-expected 2025 sales target and an increase in its dividend payout. NARI, which makes electrical equipment, added further as it is expected to benefit from the government’s intention to boost renewable energy. At the sector level, our stock choices in consumer staples helped the portfolio. CP All, one of Thailand’s largest convenience store operators, lifted returns as it is expected to benefit from a “COVID-off’ environment. Stock preferences in consumer discretionary and our underweight in this laggard sector also boosted performance. Our underweight in Meituan Dianping, a China-based ecommerce platform providing services such as food delivery, helped as its share price paused for breath after surging last year. In contrast, our stock choices and underweight in financials, which outperformed, curbed returns. Our avoidance of China’s largest banks hurt as these lenders were favoured by the market amid expectations of higher interest rates and following strong quarterly profits.

Holdings

Total
Holdings
88
Largest Holding Taiwan Semiconductor Manufacturing 9.12% Was (31-Dec-2020) 7.94%
Other View Full Holdings Quarterly data as of  31-Mar-2021
Top 10 Holdings 42.02% View Top 10 Holdings Monthly data as of  30-Apr-2021

Largest Top Contributor^

Taiwan Semiconductor Manufacturing
By 2.13%
% of fund 8.98%

Largest Top Detractor^

Samsung Electronics
By -1.39%
% of fund 7.18%

^Absolute

Quarterly Data as of 31-Mar-2021

Top Purchase

Taiwan Semiconductor Manufacturing
8.97%
Was (31-Dec-2020) 7.94%

Top Sale

AIA Group
2.64%
Was (31-Dec-2020) 4.31%

Quarterly Data as of 31-Mar-2021

31-Dec-2020 - Anh Lu, Portfolio Manager,

In the final quarter of 2020, with the overall market focus tilting towards a return to normality and shifting away from those companies that had benefited from the pandemic, we initiated positions in businesses that will likely emerge even stronger once conditions normalize but whose potential the market has yet to fully recognize.

We continued to pursue cyclical growth companies that have been hurt by prolonged lockdowns and will gain from a return to more normal conditions. These are businesses with secular growth opportunities that have been hampered by a cyclical downturn due to the coronavirus outbreak. We have put these cyclical growth companies into two buckets. First, growth stocks that were sold off due to the pandemic and traded at unjustifiably low. We believe they offer attractive risk/reward prospects in a scenario where the pandemic abates. Secondly, high-quality cyclical stocks such as some technology companies that were already benefiting from the adoption of online trends before the pandemic and are continuing to benefit as people stay at home.

During the quarter, we favored more innovative companies with management teams that can navigate, respond and identify opportunities in rapidly changing environments. By innovation, we do not solely refer to the use of technology, but other strategic and enterprising ways a company seeks to improve its market positioning.

Our portfolio positioning remains bottom-up driven and we continue to prefer companies that may be able to gain market share in consolidating industries while also having a strong enough capital structure to weather a potentially prolonged downturn in business activity. We favor stocks with multi-year growth stories and are not merely mean-reversion opportunities.

Information Technology

The portfolio has a substantial exposure to the information technology (IT) sector as we seek to benefit from the long-term growth in demand for memory chips and the surging cloud services market that has continued to increase its share in the global IT spend. The pandemic has brought about a surge in videoconferencing, online shopping, streaming services, and video gaming, increasing the reliance on cloud computing where data is stored, and applications are processed in centralized data centers with users able to access the technology over the internet.

  • We increased our exposure to IT services as we bought a position in GDS Holdings, a private datacenter company in China. GDS has been benefiting from structural cloud demand and growing its share above the market due to its superior execution by its stable management team that is return-focused and diversified client base. We believe GDS is one of the highest quality cloud companies in China offering value-added services and stands out from other datacenter companies that end up as pure tech real estate providers. We are optimistic about its long-term demand trajectory as Chinese companies that started out with a public cloud service increasingly move towards hybrid or private clouds and GDS will benefit from such a trend.

Consumer Discretionary

We have a sizeable absolute position in the consumer discretionary sector. We own companies that we believe may exhibit higher growth potential especially as the rollout of vaccines is likely to boost demand for their products and services. We have positions in companies that will benefit from long-term trends such as the strength of Asian consumption supported by increasing household income and the deepening penetration of ecommerce, accelerated by the coronavirus pandemic. 2020 brought forward potentially years of growth in ecommerce as people grew accustomed to working, shopping and consuming media from home, a pronounced shift that benefited established online companies as well as nascent ones. For one, the pandemic increased online grocery shopping in Asia and this behavior could persist even after the end of the pandemic.

  • We sought to diversify our exposure to the China online space by establishing a position in Pinduoduo. We believe Pinduoduo, where Tencent has a stake, is able to grow the ecommerce market, helped in part by its differentiated positioning as a marketplace for value-for-money products. We initially deemed that Pinduoduo would have difficulty competing with bigger rivals such as Alibaba, but in the last 12-18 months it has found innovative ways to help grow the ecommerce pie. Its community grocery business will likely be a new growth driver.
  • We invested in New Oriental Education, a Chinese after-school tutoring provider that we view as a market share gainer. The company will likely benefit from increased demand for offline tutoring services as living conditions return to normal. While it has a small online learning subsidiary, the company generates the bulk of its revenues from its nationwide network and learning centers in China.

Consumer Staples

We have a significant exposure to consumer staples. Domestic consumption remains an overarching theme in our portfolio. We believe that Asian households are generally under levered and consumption is a secular opportunity. In the quarter, we reduced our allocation to this sector as we switched to more cyclical growth companies that stand to gain from a recovery once the pandemic subsides. However, we still made a company-specific initiation during the period.

  • We bought Amorepacific, the largest domestic cosmetics company in South Korea with a growing international business. The coronavirus pandemic and the tenuous China-South Korea relationship have contributed to its depressed earnings, but the vaccine news bodes well for its business and we think that at some point the China-South Korea geopolitical issues can be resolved. We view the company's efforts to clean up its distribution system, cut costs, and launch new products as positive.
  • We sold Jiajiayue Group, a food retailer in China with high revenue exposure to fresh products, after it had a strong run in the first half of 2020 during the pandemic. Heightened competition in the online grocery segment with the entry of new companies also hurt the stock. Its rivals have adopted a "community group-buy" model that taps community leaders to collect grocery products needed by their respective neighborhoods through an app. This change to the competitive landscape could scale up fast and potentially affect Jiajiayue's operations.��

Communication Services

The portfolio has a sizable position in the communication services sector in absolute terms. Our focus here is on social media platforms and search engine companies that are benefiting from developments such as increased remote working and consumption of goods and services from home.

  • We sold shares in Baidu, the dominant search engine in China, as we viewed its recent acquisition of a video streaming business as lacking in synergy with its core business.
  • We invested in Converge ICT Solutions, a Philippine-based fixed broadband company that has gained market share in a two-player underpenetrated market. We think it will continue to benefit from strong demand for connectivity as the pandemic accelerates the work-from-home trend. The Philippines has one of the lowest broadband penetration rates in the region and the competitive landscape is favorable as the incumbent providers focus more on 5G rollout.

Materials

We do not have significant exposure in materials, a traditional value pocket, given our mandate and a dearth of sustainable growth opportunities in this economically sensitive sector.

  • With the positive news of vaccine rollout programs and fiscal stimulus measures in parts of the world, particularly outside Asia, we took the opportunity to buy POSCO, one of the world's largest steel producers. Its fundamentals are recovering, which were affirmed by its better-than-consensus solid earnings execution. We believe the recent improvement in the demand-supply dynamic and steel margin will be more sustained this time around. POSCO is expected to benefit from a recovery in auto steel demand and pick-up in shipbuilding orders.

Sectors

Total
Sectors
10
Largest Sector Information Technology 25.85% Was (31-Mar-2021) 26.27%
Other View complete Sector Diversification

Monthly Data as of 30-Apr-2021

Indicative Benchmark: MSCI All Country Asia ex Japan Index

Top Contributor^

Communication Services
Net Contribution 0.92%
Sector
0.03%
Selection 0.89%

Top Detractor^

Financials
Net Contribution -0.41%
Sector
-0.07%
Selection
-0.34%

^Relative

Quarterly Data as of 31-Mar-2021

Largest Overweight

Industrials & Business Services
By3.75%
Fund 9.20%
Indicative Benchmark 5.45%

Largest Underweight

Financials
By-3.79%
Fund 14.26%
Indicative Benchmark 18.06%

Monthly Data as of 30-Apr-2021

31-Mar-2021 - Anh Lu, Portfolio Manager,
The portfolio has a sizeable exposure to the industrials and business services sector in relative terms. We own stocks that we believe are market share gainers in their industry and are likely to benefit from the reopening of the global economy. We also have positions in businesses that will in our view gain from the trend toward environmental protection and greater reliance on renewable energy, especially in China. We are positive about the sector as many classic industrial businesses are looking more like technology companies, which in our view could be an area of growth especially in China. These companies could deliver strong potential performance over the next few years.

Countries

Total
Countries
11
Largest Country China 43.62% Was (31-Mar-2021) 41.59%
Other View complete Country Diversification

Monthly Data as of 30-Apr-2021

Indicative Benchmark: MSCI All Country Asia ex Japan Index

Top Contributor^

China
Net Contribution 1.02%
Country
0.10%
Selection 0.91%

Top Detractor^

Taiwan
Net Contribution -0.19%
Country
0.03%
Selection
-0.22%

^Relative

Quarterly Data as of 31-Mar-2021

Largest Overweight

China
By1.30%
Fund 43.62%
Indicative Benchmark 42.32%

Largest Underweight

South Korea
By-5.79%
Fund 9.29%
Indicative Benchmark 15.08%

Monthly Data as of 30-Apr-2021

31-Mar-2021 - Anh Lu, Portfolio Manager,
We reduced our underweight position in China as of the end of March. Valuation in some pockets of the China market are demanding particularly in the electric vehicle space but we continue to find compelling opportunities with growth prospects. We invested in shares of companies that we view as share gainers in a growing industry. We also purchased shares of one of China’s largest airports, that will likely benefit from the resumption of international travel. China remains our biggest absolute country position.

Team (As of 12-May-2021)

Anh Lu

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

Ms. Lu has 25 years of investment experience, 19 of which have been with T. Rowe Price. Prior to joining the firm, she was a vice president of the Asia Pacific Technology Investment Banking Division of Salomon Smith Barney in Hong Kong. Before Salomon Smith Barney, Ms. Lu spent three years at LGT Asset Management as an analyst and portfolio manager.

Ms. Lu earned a B.A. with honours from the University of Western Ontario.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    20
  • Years investment
    experience
    26
Nick Beecroft, CFA

Nick Beecroft is the APAC head of the Investment Specialist Group and a portfolio specialist in the Equity Division. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Nick’s investment experience began in 2001, and he has been with T. Rowe Price since 2005, beginning in the Equity Division. Prior to this, Nick was employed by Mercer Investment Consulting as an investment analyst.

Nick earned a B.A., with honors, in contemporary European studies from the University of Southampton. He also has earned the Chartered Financial Analyst® designation.

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

  • Years at
    T. Rowe Price
    16
  • 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 1.72%
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 0.87%

Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.