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SICAV

Asian Opportunities Equity Fund

A concentrated portfolio of high-quality Asian companies.

ISIN LU1071374836 WKN A114WK

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

12.34%
$70.9m

1YR Return
(View Total Returns)

Manager Tenure

23.25%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.85
4.33%

Inception Date 21-May-2014

Performance figures calculated in USD

Other Literature

31-Oct-2019 - Eric C. Moffett, Portfolio Manager,
We are mindful that the U.S.-China trade tensions may stoke volatility for some time, but we remain constructive about the longer term prospects of the Asia ex-Japan region. While we are not ruling out the possibility of an interim trade deal, we have focused on well-managed companies supported by domestic demand. Valuations in the region are attractive and earnings growth expectations for next year are better compared with this year’s tepid picture.
Eric C. Moffett
Eric C. Moffett, Portfolio Manager

Eric Moffett is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited. He is the portfolio manager for the firm's Asia Opportunities equity strategy and chairman of the strategy's Investment Advisory Committee. 

Click for Manager Outlook
 

Strategy

Manager's Outlook

We believe that Asia ex-Japan equity markets continue to offer opportunities to investors looking for top-quality companies. But it will require careful navigation given the uncertainty brought about by the frayed trade relations between the U.S. and China.

We are well positioned for an environment where the U.S. and China fail to arrive at a comprehensive and conclusive trade agreement, which may slow global growth further at the margin. We think that the full resolution of all the trade issues may take years. However, we are not ruling out the possibility of an interim deal that resolves some parts of the U.S.-China trade dispute.

Most of the stocks we own are supported by domestic demand and hence the direct impact of the China-U.S. trade uncertainty may be limited as far as the strategy is concerned. However, we continue to keep a close eye on developments concerning the trade talks and remain watchful of company earnings following the imposition of tariffs.

We are mindful that the trade tensions may stoke volatility for some time, but we remain constructive about the long-term prospects of the region, backed by robust domestic demand and income growth. In China, where consumption is the largest part of the economy, we expect consumer demand to be supported by continued growth in household incomes as minimum wages increase due to the tight labor market.

We believe China will continue transitioning its economy carefully, balancing growth stabilization with deleveraging efforts while managing the impact of the trade tensions with the U.S. In China, we look for leaders in industries that are undergoing consolidation, as well as gaining market share. We think China is potentially a rich source of high-quality companies that are moving up the value chain and pushing the boundaries of innovation.

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.

Investment Approach

  • Seeking long term capital appreciation to come from owning high quality businesses that will reliably compound earnings/ cash flow generation over time.
  • In Asia, this type of company tends to exhibit three key characteristics:
    • Established companies with leading market positions.
    • Good management teams who care about shareholder returns.
    • Returns-focused capital allocation and prudent balance sheet management.
  • Fundamental research is critical in helping us to identify these characteristics and exploit market inefficiencies:
    • Focus on the long term. Be patient.
    • Gain a better understanding of the durability of a company’s prospects than the market.
    • More accurately assess a company’s intrinsic value than other market participants.

Portfolio Construction

  • Typically 40-70 stock portfolio
  • Individual positions typically range from 0.50% to 6.00%.
  • Country and sector weightings a residual of stock selection.
  • Cash position typically less than 5%.

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 23.25% 12.34% 8.42% 8.83% 8.83%
Indicative Benchmark % 13.24% 8.46% 4.76% 4.98% 4.98%
Excess Return % 10.01% 3.88% 3.66% 3.85% 3.85%

Inception Date 21-May-2014

Manager Inception Date 21-May-2014

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  31-Oct-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 6.15% 9.82% 7.94% 8.10%
Indicative Benchmark % -3.44% 6.32% 4.23% 4.20%
Excess Return % 9.59% 3.50% 3.71% 3.90%

Inception Date 21-May-2014

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 18-Nov-2019 Quarter to DateData as of 18-Nov-2019 Year to DateData as of 18-Nov-2019 1 MonthData as of 31-Oct-2019 3 MonthsData as of 31-Oct-2019
Fund % 1.39% 5.86% 18.07% 4.41% 4.28%
Indicative Benchmark % 1.26% 5.87% 11.92% 4.55% 1.64%
Excess Return % 0.13% -0.01% 6.15% -0.14% 2.64%

Inception Date 21-May-2014

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.

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 - Eric C. Moffett, Portfolio Manager,
Signs of progress in the U.S.-China trade talks and policy support from several central banks extended gains in Asia ex-Japan equities for a second straight month in October. Within the portfolio, our stock selection in outperforming South Korea lifted portfolio performance, led by Amorepacific Group on positive third-quarter results. Shares of the cosmetics company gained further as it is seen as a benetting from calls to boycott Japanese products due to the tense bilateral ties between the two nations. On a sector level, our stock choices in industrials and business services, such as property management company Greentown Service Group, and in real estate, such as Shimao Property, boosted returns. Both reported positive first-half results and we think they will likely continue to gain market share. In contrast, our stock choices in India, such as Kotak Mahindra Bank (KMB), hurt performance. KMB's share price took a breather following year-to-date gains, even as it reported strong quarterly results. We continue to like this high-quality banking franchise. Within consumer discretionary, our position in fastfood chain operator Yum China crimped returns as its share price paused following sharp first-half gains. The business is solid and cash flow generation remains strong, in our view.

Holdings

Total
Holdings
51
Largest Holding Alibaba Group Holding 6.25% Was (30-Jun-2019) 5.55%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 41.72% View Top 10 Holdings Monthly data as of 31-Oct-2019

Largest Top Contributor^

Taiwan Semiconductor Manufacturing
By 2.79%
% of fund 6.21%

Largest Top Detractor^

Tencent Holdings
By -3.35%
% of fund 6.20%

^Absolute

Quarterly Data as of 30-Sep-2019

Top Purchase

Taiwan Semiconductor Manufacturing
6.21%
Was (30-Jun-2019) 4.32%

Top Sale

HKT Trust & HKT Limited
2.49%
Was (30-Jun-2019) 5.24%

Quarterly Data as of 30-Sep-2019

31-Oct-2019 - Eric C. Moffett, Portfolio Manager,
We increased our overweight in real estate as we initiated a position in a Hong Kong commercial landlord, which has a strong financial position and is focused on ensuring a stable absolute dividend. This stock is not very reliant on visiting tourists from the mainland. We also took the opportunity to add to our existing holdings in high-conviction names within the consumer discretionary sector. These businesses, which include a Chinese ecommerce company and a fast food chain operator, will likely continue to benefit from strong domestic demand and hold up relatively well under trade tensions.

Sectors

Total
Sectors
10
Largest Sector Financials 20.29% Was (30-Sep-2019) 20.62%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor^

Industrials & Business Services
Net Contribution 1.48%
Sector
-0.06%
Selection 1.54%

Top Detractor^

Consumer Discretionary
Net Contribution -0.21%
Sector
-0.05%
Selection
-0.15%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Consumer Staples
By4.33%
Fund 9.74%
Indicative Benchmark 5.41%

Largest Underweight

Information Technology
By-5.93%
Fund 12.23%
Indicative Benchmark 18.16%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - Eric C. Moffett, Portfolio Manager,
In China, our biggest country position, we increased our allocation to stocks where we hold strong conviction, including a maker of industrial automation products that will likely benefit from import substitution by Chinese companies amid the trade tensions. We also boosted our positions in two ecommerce companies, a fast-food chain company and an insurer – names that are supported by domestic demand and are more likely to withstand the vagaries of trade relations. In South Korea, we turned less underweight as we increased our holdings in a memory chipmaker that will benefit from recovering demand due to accelerating use of 5G technology.

Countries

Total
Countries
9
Largest Country China 40.87% Was (30-Sep-2019) 39.92%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor^

India
Net Contribution 1.76%
Country
0.04%
Selection 1.72%

Top Detractor^

Thailand
Net Contribution -0.13%
Country
0.02%
Selection
-0.15%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

India
By4.35%
Fund 14.85%
Indicative Benchmark 10.50%

Largest Underweight

Taiwan
By-6.45%
Fund 7.52%
Indicative Benchmark 13.97%

Monthly Data as of 31-Oct-2019

30-Sep-2019 - Eric C. Moffett, Portfolio Manager,
In China, our biggest country position, we turned to a relative overweight in September from an underweight the previous month. Aside from new investments in a telecommunications firm and a search engine company, we started a position in one of the better-managed, show-based Chinese theme park operators with mass market appeal. It has a net cash business and we view it as a beneficiary of domestic travel and leisure growth. In Thailand, we reduced our relative underweight by building a position in a cement, petrochemical and paper producer, which is a big index weight with high yield.

Team (As of 31-Aug-2019)

Eric C. Moffett

Eric Moffett is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited. He is the portfolio manager for the firm's Asia Opportunities equity strategy and chairman of the strategy's Investment Advisory Committee. 

Mr. Moffett has 19 years of investment experience, 12 of which have been with T. Rowe Price. Prior to joining the firm in 2007, Mr. Moffett was an analyst with Fayez Sarofim & Company, where he covered the household products, communications equipment and lodging/leisure industries. Mr. Moffett also was employed as an associate at Audax Group and as a management consultant with Bain & Company.

Mr. Moffett earned an A.B., magna cum laude, in economics from Princeton University and an M.B.A. from Harvard Business School.

  • Fund manager
    since
    2014
  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    18
Nick Beecroft

Nicholas Beecroft is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Beecroft has 18 years of investment experience, 14 of which have been with T. Rowe Price. He joined the firm in London in 2005 and spent many years working with our emerging markets equity team. Mr. Beecroft has been based in Hong Kong since 2011. Prior to joining T. Rowe Price, he was an investment analyst at Mercer Investment Consulting.

Mr. Beecroft earned a B.A, with honours, in contemporary European studies from the University of Southampton. He also has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    18

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 2.07%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 1.10%
Class Q $15,000 $100 $100 0.00% 75 basis points 1.17%

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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