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European Equity Fund

Style agnostic, focus on quality to maintain a balanced portfolio.

ISIN LU0285831334 WKN A0MNMX

3YR Return Annualised
(View Total Returns)

Total Assets


1YR Return
(View Total Returns)

Manager Tenure


Information Ratio
(5 Years)

Tracking Error
(5 Years)


Inception Date 26-Feb-2007

Performance figures calculated in EUR

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31-Aug-2019 - Dean Tenerelli, Portfolio Manager,
Although the European equity market has rallied strongly this year, trading has been more volatile. The overall gains masked bouts of shifting sentiment and direction caused by uncertainty surrounding trade, economic fundamentals, and central bank intentions. Investor concerns around these issues remain elevated, hence we expect further volatility may be in store. While valuations are near their historical averages after the market rally at the start of the year, we are still finding a wider range of investments.
Dean Tenerelli
Dean Tenerelli, Portfolio Manager

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Click for Manager Outlook


Manager's Outlook

European markets are likely to be more volatile in 2019 than last year, given the removal of economic stimulus, slowing growth, and geopolitical risks. Economic fundamentals generally may be deteriorating, and the outlook has become cloudier.

Apart from the slowing economy, investor concerns also embrace specific countries, such as China and Mexico; worsening trade relations between the world's three largest blocs, which are affecting the automotive, technology, mining, and banking industries in particular; Italy's strained relationship with the European Union; and the tortuous Brexit process.

Doubts On Earnings Growth

The first-quarter corporate results season cemented expectations of modest earnings growth over the next 12 months, although whether this can be sustained given the gloomier outlook is now open to question. We are still finding a wider range of investments, even though valuations are near their historical averages after the market rally at the start of the year.

We welcome the more volatile market and greater dispersion of returns because this gives us more relative opportunities to exploit. For example, certain industries-such as semiconductors and automotives-have been especially penalized by investors, and selective investments are emerging there. However, we would caution against expecting a rapid recovery in their fortunes in general.

We continue, however, to seek a broad spread of exposures, so that even if a more positive economic scenario unfolds, then the portfolio should display a good degree of resilience.

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 European companies.

Investment Approach

  • Fundamental research is critical to successfully identify and assess long-term investment opportunities. We look for companies with high returns on capital and capable of providing sustainable earnings across the market cycle.
  • Style agnostic, focus on quality. By avoiding style constraints, we can invest in quality companies and maintain a balanced portfolio through market cycles.
  • Disciplined approach to valuation. We aim to buy businesses at a clear discount to their intrinsic value.
  • Risk management is essential and is assisted by diversification, quantitative analysis, and automatic stabilizers built into our investment process.

Portfolio Construction

  • Typically 50-80 stocks
  • Individual position size up to 4.0% relative to the indicative benchmark
  • Sector ranges: typically +/- 10% relative to the indicative benchmark
  • Country ranges: typically +/- 10% relative to the indicative benchmark
  • Expected Tracking Error: typically 3.0% to 6.0%
  • Information Ratio objective: >0.5
  • Cash target range: fully invested, typically less than 5.0%
  • Turnover range: 40%-100%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
5 YR
10 YR
Since Manager Inception
Fund % 8.20% 7.83% 6.22% 9.40% 10.63%
Indicative Benchmark % 5.74% 7.65% 5.44% 7.73% 9.11%
Excess Return % 2.46% 0.18% 0.78% 1.67% 1.52%

Inception Date 26-Feb-2007

Manager Inception Date 06-May-2009

Indicative Benchmark: MSCI Europe Index Net

Data as of  30-Sep-2019

  1 YR 3 YR
5 YR
10 YR
Fund % 8.20% 7.83% 6.22% 9.40%
Indicative Benchmark % 5.74% 7.65% 5.44% 7.73%
Excess Return % 2.46% 0.18% 0.78% 1.67%

Inception Date 26-Feb-2007

Indicative Benchmark: MSCI Europe Index Net

Data as of  30-Sep-2019

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 07-Oct-2019 Quarter to DateData as of 07-Oct-2019 Year to DateData as of 07-Oct-2019 1 MonthData as of 30-Sep-2019 3 MonthsData as of 30-Sep-2019
Fund % -2.30% -2.30% 18.97% 2.93% 2.93%
Indicative Benchmark % -2.59% -2.59% 16.15% 3.76% 2.57%
Excess Return % 0.29% 0.29% 2.82% -0.83% 0.36%

Inception Date 26-Feb-2007

Indicative Benchmark: MSCI Europe Index Net

Indicative Benchmark: MSCI Europe Index Net

Performance figures calculated in EUR

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-Aug-2019 - Dean Tenerelli, Portfolio Manager,
European equities weakened in August in volatile trade as fears the global economy was heading for recession intensified due to an escalation in trade tensions between the U.S. and China. Political instability in Italy and a hardening in the UK government’s Brexit stance added to the uncertainty. In the fund, consumer discretionary, industrials and business services, and communication services performed best in relative terms due to positive stock picking. However, our underweight in consumer staples, which exceeded positive stock selection here, was the main curb on returns. Health care, the next worst performer, was undermined by our choice of securities. EssilorLuxottica, the world’s leading eyewear company, outperformed in the consumer discretionary sector after decent first-half results, which showed an acceleration of sales growth and stronger-than-expected cash flow generation, and confirmation of 2019 guidance. Investors also expect hefty synergies from the integration of Grandvision, a rival whose purchase was confirmed at the end of July. Within health care, our off-benchmark holding in Getinge, a Swedish medical technology company with product areas including surgery, intensive care, infection control and patient handling, underperformed modestly amid profit-taking after the strong run in the shares this year. We believe management is turning the company around successfully and that Getinge is on the brink of demonstrating its true potential.


Largest Holding Nestle 4.53% Was (31-Mar-2019) 4.35%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 29.53% View Top 10 Holdings Monthly data as of 31-Aug-2019

Largest Top Contributor^

By 1.64%
% of fund 4.52%

Largest Top Detractor^

By -0.56%
% of fund 2.28%


Quarterly Data as of 30-Jun-2019

Top Purchase

EssilorLuxottica (N)
Was (31-Mar-2019) 0.00%

Top Sale

Greene King (E)
Was (31-Mar-2019) 1.91%

Quarterly Data as of 30-Jun-2019

31-Dec-2018 - Dean Tenerelli, Portfolio Manager,

Attractively Valued Stocks Emerged as Market Retrenched

Attractive opportunities have emerged in the equity market retrenchment at the end of 2018. These conditions suit our investment approach as they allow us to buy strong high-quality businesses and to diversify the portfolio. We increased our positions most in defensive sectors, such as utilities and real estate, and reduced them in the more cyclical sectors. However, the decline in cyclicals did not deter us from assessing high-quality opportunities with durable earnings that emerged there. On balance, we are tending to find more attractive opportunities in companies that have a more defensive profile or where we believe the market misunderstands the fundamental outlook and unfairly penalizes the company. At the same time, we continue to seek a relatively balanced portfolio in terms of exposures to possible economic scenarios, so that our relative performance is not dependent on a particular "macro" environment.

We altered our positioning by:

  • Raising our exposure to utilities, now our largest overweight, initiating in Iberdrola
  • Moving to an overweight in real estate, adding Great Portland Estates
  • Reducing our underweight in materials, investing in Koningklijke DSM
  • Slimming our overweight in industrials and business services

Raised Exposure to Utilities, Now Biggest Overweight

We increased our exposure to utilities, which is now our biggest overweight. We are overweight in the gas and multi-utilities industries, where we hold Italian names Italgas, a natural gas distribution company, and Hera, a public utility company. We also hold Red Electrica, a partly state-owned and public limited Spanish corporation that operates Spain's national electricity grid.

  • We initiated an investment in Iberdrola, a Spain-based integrated utility company, taking advantage of weakness in the share price, which is driven by regulatory uncertainty. The company is attractively valued, provides a steady income stream, and should benefit over the longer term from its position in the decarbonized renewables and electricity transmission markets. It also has a potential pipeline of new assets extending beyond 2025.

Moved to Overweight in Real Estate

As we seek to maintain a balanced portfolio to counter the impact of market volatility, we raised our exposure to the real estate sector by adding UK office developer Great Portland Estates (GPOR). Our other investment is in Aedas Homes, a Spanish house builder with a large land bank.

  • We believe GPOR, which operates in central London, is undervalued by the market. The management team has an excellent track record, the balance sheet is strong, and the values of its office assets are being underestimated. We believe there is a high probability that GPOR will return capital to shareholders after a successful disposals program.

Reduced Underweight in Materials

We increased our allocation to materials, a sector that we have not favored largely because we did not like the business models of many companies within it. However, when opportunities to own high-quality companies arise, such as in the current market retrenchment, we are happy to invest in them. To this end, we opened a position in Koningklijke DSM, a leading vitamin maker and performance materials business.

We currently own France-based Air Liquide, a large international industrial gas company; Corbion, a Dutch biobased ingredients company operating in the food and biochemical sectors; and Johnson Matthey, a specialty chemicals company that is also the world's biggest auto catalyst maker.

  • We took advantage of share price weakness to invest in DSM. We believe the business is becoming more stable and focused on growth, thanks to the acquisition-driven transformation program. In our view, improving organic growth, an effective cost and capital efficiency program, and the end of the headwind of falling vitamin E prices should drive a share price recovery and outperformance.

Reduced Overweight in Industrials and Business Services

We reduced our overweight industrials and business services amid signs that the European economy is losing momentum, a less favorable environment for this cyclical sector.

We continued to adjust the composition of our holdings, taking advantage of the market decline to sell companies that have underperformed and invest in high-quality businesses with strong industry positions and durable earnings that are now more realistically valued.

We sold out of CNH Industrial, one of the world's largest capital good companies; Trelleborg, a Sweden-based engineering company that develops polymer sealing solutions and wheel systems; and Wolters Kluwer, a Dutch print and digital publisher, after a strong run.

In terms of industry, our largest weight is still professional services companies. We own Bureau Veritas, a France-based international certification agency, and Experian, the leading global provider of credit information with operations in 17 countries, and we swapped Wolters Kluwer for RELX, the world's leading publisher of science journals and a provider of risk assessments on transactions with retail customers. Electrical equipment and aerospace and defense are also overweights. In the former, our biggest position is Schneider Electric, a global specialist in energy management and automation. In the latter, we also hold Dassault Aviation, another French company.

  • We started investing in RELX because we believe the market underestimates the quality and sustainability of growth at the risk business, which provides one of the leading online identity verification tools. It should benefit from the recent acquisition of the ThreatMetrix, one of the leading electronic devices databases. We also believe the risks around the science publishing business are overdone.
  • We sold our position in CNH Industrial because slowing economic momentum and increasing uncertainty in the agricultural sector about the possible impact of tariffs and trade disruptions could further curb sales growth in the main divisions. We exited Trelleborg as signs of weakening demand and emerging risks in the automotive agricultural and industrials segments could, in our view, weigh further on the share price after a period of underperformance.

Maintained Health Care Overweight; Exited Fresenius

We have retained our overweight allocation to the health care sector amid the market uncertainty, which favors defensive sectors. We sold Fresenius, a provider of health care-related products and services, and sister company Fresenius Medical Care after both companies issued a second surprise profit warning in the space of two months. Neither company now expects net income growth in 2019.

We hold sizable positions in pharmaceuticals, with overweights in two Swiss companies, Roche Holding and Novartis, a manufacturer of health care and nutritional products. We also hold Getinge, an off-benchmark Swedish medical technology company with product areas such as surgery, intensive care, infection control, and patient handling.


Largest Sector Industrials & Business Services 16.08% Was (31-Aug-2019) 15.78%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI Europe Index

Top Contributor^

Information Technology
Net Contribution 0.30%
Selection 0.23%

Top Detractor^

Health Care
Net Contribution -0.15%


Quarterly Data as of 30-Sep-2019

Largest Overweight

Fund 8.25%
Indicative Benchmark 4.47%

Largest Underweight

Consumer Staples
Fund 5.24%
Indicative Benchmark 14.92%

Monthly Data as of 30-Sep-2019

31-Aug-2019 - Dean Tenerelli, Portfolio Manager,
We raised our allocation to industrial and business services, maintaining a balanced portfolio with the aim of benefitting from any move higher in the index. For example, we added a German engineering conglomerate that is a leader in food processing equipment whose long-term potential, in our view, is not reflected in the share price. We also invested a Swedish engineering company that we believe will perform resiliently in this late stage of the economic cycle. We moved from a broadly neutral position in consumer discretionary to an underweight by exiting Playtech, the online gambling software provider, on disappointing performance.


Largest Country United Kingdom 18.30% Was (31-Aug-2019) 17.68%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI Europe Index

Top Contributor^

Net Contribution 0.40%
Selection 0.33%

Top Detractor^

Net Contribution -0.35%


Quarterly Data as of 30-Sep-2019

Largest Overweight

Fund 9.81%
Indicative Benchmark 4.63%

Largest Underweight

United Kingdom
Fund 18.30%
Indicative Benchmark 25.88%

Monthly Data as of 30-Sep-2019

30-Sep-2018 - Dean Tenerelli, Portfolio Manager,
The new position in the aforesaid Belgian bank reduced our underweight allocation to the country. Otherwise, our country weights were little changed. Our country positioning is a function of our bottom-up stock picking.

Team (As of 31-Aug-2019)

Dean Tenerelli

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Tenerelli has 28 years of investment experience, 19 of which have been at T. Rowe Price. He joined the firm in 2000 as an equity research analyst and was appointed co-manager of the firm's Global Equity Strategy in 2004. Prior to joining T. Rowe Price, Mr. Tenerelli served as a director for Credit Suisse Asset Management, where he was a senior telecommunications analyst. Prior to Credit Suisse Asset Management, Mr. Tenerelli worked as assistant portfolio manager at Artisan Partners (1995-2000). He began his investment career in 1993 at Banesto Bolsa in Madrid as an equity analyst following Spanish equities. Mr. Tenerelli later became an international equity analyst, focused on Europe, for Waddell and Reed in Kansas City, MO. In 1995, he moved to Artisan Partners as an assistant portfolio manager.

A graduate of Rutgers University with a B.A. in economics, Mr. Tenerelli earned an M.B.A. from Escuela Superior de Administracion y Direccion de Empresa and an M.A. in international management from American Graduate School of International Management (Thunderbird).

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Andrew Clifton

Andrew Clifton is a portfolio specialist in the Equity Division at T. Rowe Price. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Clifton has over 30 years of investment experience, nine of which have been at T. Rowe Price. Prior to joining the firm in 2010, he was an executive director at UBS Global Asset Management. Prior to that, he was a vice president at Merrill Lynch.

Mr. Clifton earned a B.Sc. in economics from the London School of Economics and an M.Sc. in econometrics from the University of Southampton.

  • Years at
    T. Rowe Price
  • Years investment

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 0.73%
Class Q €15,000 €100 €100 0.00% 65 basis points 0.78%

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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