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

Other Literature

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

European Smaller Companies Equity Fund

Seeking to identify tomorrow’s winning European growth companies.

ISIN LU0382931417 WKN A0RC40

3YR Return Annualised
(View Total Returns)

Total Assets
(EUR)

8.31%
€196.3m

1YR Return
(View Total Returns)

Manager Tenure

27.99%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.60
6.52%

Inception Date 26-Nov-2008

Performance figures calculated in EUR

Other Literature

30-Nov-2020 - Ben Griffiths, Portfolio Manager,
The development of at least three coronavirus vaccines that appear to be highly efficient now offer the hope of a recovery from deep recession caused by the pandemic. To some extent, the recovery will depend on the efficacy and distribution of the vaccines, while the level of continuing policy support, the evolution of corporate and consumer confidence and the degree of disruption caused by post-Brexit trading arrangements will determine the longer-term trajectory of activity.
Benjamin Griffiths
Benjamin Griffiths, Portfolio Manager

Ben Griffiths is the portfolio manager for the European Smaller Companies Equity Strategy in the International Equity Division, covering European small-cap stocks and co-portfolio manager of the International Small-Cap Equity Strategy.  Ben is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

 

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 smaller publicly traded European companies.

Investment Approach

  • Invests in European small- and mid-cap companies capable of sustaining above-average, long-term earnings growth and selling at reasonable prices.
  • Benchmark-unconstrained approach exploits diverse opportunities in developed Europe, peripheral, and European Union (EU) accession countries.
  • Exposure to companies at different stages in the growth cycle offers the potential for more consistent performance across market cycles.
  • Long-term investment horizon emphasizes bottom-up stock selection as the primary source of excess return.
  • Dedicated London-based research team seeks companies with:
    • Attractive industry structure.
    • Compelling business models.
    • Strong growth prospects.
    • Solid management teams.
    • Reasonable valuations.

Portfolio Construction

  • Typically 70-100 stock portfolio
  • Diversification at the security, country, region, and sector levels offers the potential for attractive risk-adjusted returns
  • Bias toward high-quality stocks provides the potential for downside risk protection
  • Risk parameters
    • Emerging Europe exposure: maximum 10%
    • Typical position size: 0.50% to 5.00%
    • Low turnover expected
    • Expected tracking error: 3% to 7%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 27.99% 8.31% 10.68% 12.90% 10.68%
Indicative Benchmark % 4.58% 4.97% 6.78% 9.83% 6.78%
Excess Return % 23.41% 3.34% 3.90% 3.07% 3.90%

Inception Date 26-Nov-2008

Manager Inception Date 31-Dec-2015

Indicative Benchmark: MSCI Europe Small Cap Index Net

Data as of 31-Dec-2020

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 27.99% 8.31% 10.68% 12.90%
Indicative Benchmark % 4.58% 4.97% 6.78% 9.83%
Excess Return % 23.41% 3.34% 3.90% 3.07%

Inception Date 26-Nov-2008

Indicative Benchmark: MSCI Europe Small Cap Index Net

Data as of 31-Dec-2020

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 14-Jan-2021 Quarter to DateData as of 14-Jan-2021 Year to DateData as of 14-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % 2.62% 2.62% 2.62% 6.47% 15.25%
Indicative Benchmark % 3.27% 3.27% 3.27% 5.96% 16.64%
Excess Return % -0.65% -0.65% -0.65% 0.51% -1.39%

Inception Date 26-Nov-2008

Indicative Benchmark: MSCI Europe Small Cap Index Net

Indicative Benchmark: MSCI Europe Small Cap 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.

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. 

30-Nov-2020 - Ben Griffiths, Portfolio Manager,
The MSCI Europe Small Cap Index posted strong monthly gains in November as encouraging announcements related to the development of potential coronavirus vaccines fuelled optimism that the economic recovery could accelerate next year. At a portfolio level, consumer discretionary, health care and communication services were the worst-performing sectors. Stock picking was the main drag on relative performance, apart from in health care, where an overweight allocation was the main negative effect. Shop Apotheke Europe, a Netherlands-based online pharmacy, performed worst in consumer discretionary. The shares at first rose strongly on better-than-expected final third-quarter earnings results that showed an increased profit. The company also raised sales guidance. However, the pronounced market rotation away from growth stocks to value-oriented, cyclical names during the month then caused the shares to fall sharply. On the positive side, stock selection and an underweight exposure supported real estate, while a zero-weight allocation underpinned consumer staples.

Holdings

Total
Holdings
99
Largest Holding Ambu 3.04% Was (30-Sep-2020) 2.32%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 23.46% View Top 10 Holdings Monthly data as of  31-Dec-2020

Largest Top Contributor^

Ambu
By 0.12%
% of fund 3.06%

Largest Top Detractor^

ASOS
By -0.54%
% of fund 1.99%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Shop Apotheke Europe
2.22%
Was (30-Sep-2020) 2.03%

Top Sale

Elekta
0.21%
Was (30-Sep-2020) 1.72%

Quarterly Data as of 31-Dec-2020

30-Sep-2020 - Ben Griffiths, Portfolio Manager,

Added to Consumer Discretionary; Pared Outperformers

We added seven new names and eliminated five in the third quarter. As well as initiating in new ideas, such as in consumer discretionary, we have been trimming names that have done exceptionally well, such as in communication services and consumer staples, as well as those where we have lost conviction.

The strategy's profile continues to reflect our focus on durable growth companies with a sustainable competitive advantage. We have maintained a bias toward health care and information technology, and we also have an overweight position in communication services, largely due to our holdings in computer gaming stocks. We remain underweight to industrials and business services and to real estate.

Although we remained overweight to micro-cap names (names with a market capitalization of less than USD 500 million), we took selective advantage of relative strength to cut our exposures if we could not identify any meaningful fundamental change. Since the start of the year, 11 of the 24 names that we exited were in the micro-cap bucket.

Industrials and Business Services

We reduced our underweight in industrials and business services as attractively valued opportunities presented themselves. We initiated positions in Headhunter, a leading Russian recruitment business, and Aalberts, a diversified industrial company operating in industrial machinery and equipment. We added to Howden Joinery, the UK's leading supplier of kitchens. However, we trimmed our position in Va-Q-Tec, which designs and manufactures customized vacuum insulation panels, booking profits after strong performance.

We are overweight in professional services and industrial conglomerates. In the former, our largest position is Intertrust, an international trust and corporate management company, followed by Alpha Financial Markets, a leading global consultant to the asset and wealth management industry. In the latter, we own shares in DCC, an ex-venture capital company that provides international sales, marketing, and support services. The company offers diversified exposure to the UK/Irish economies and has an impressive long-term record of growing earnings and dividends.

In the machinery industry, apart from Aalberts, we own Va-Q-Tec and Rotork, the world's leading designer and manufacturer of heavy-duty industrial valve actuators devices. We also hold Norma, a Germany-based maker of clamps, connectors, and fluid systems that we expect to benefit from the trend of engine downsizing and carbon dioxide emission control and from the stronger global focus on leakage control of gases and fluids.

  • Headhunter is a clear market leader in the expanding online recruitment market in Russia. The company owns the largest database of CVs, giving it a scale advantage over competitors, and is the best-known brand in the market, which should help it increase market share, revenues, and margins.�

Information Technology

We increased our overweight in information technology (IT), by adding CANCOM, a German provider of information technology infrastructure and services.

IT is one of our largest absolute and relative positions, which is consistent with our growth approach. We are overweight in electronic equipment, software, and semiconductors and semiconductor equipment, where we continue to favor companies with innovative and resilient business models that are supported by solid bases of recurring revenues or driven by structural trends.

In electronic equipment, our largest holding is Renishaw, a world-leading metrology company, producing best-in-class touch-trigger probes and motion encoders for the machine tool industry. First Derivatives, a provider of software and consulting services, particularly to finance, technology and energy organizations, is our main investment in software. In semiconductors and semiconductor equipment, our biggest position is Aixtron, a leading Germany-based provider of deposition equipment to the compound semiconductor industry.

  • CANCOM is a strong company in an industry on the right side of change. We believe improving fundamentals and structural growth will be driven by digitization of German small and medium-sized companies and of government functions; outsourcing of IT functions to specialists like CANCOM; and consolidation of a fragmented IT services sector.

Consumer Discretionary

We adjusted our holdings in the consumer discretionary sector, reducing our overweight allocation. We exited Kambi, a provider of outsourced online sports betting services, and Joules Group, a British clothing company, in order to pursue ideas with greater runways for growth. We recycled the funds into positions in THG Holdings, a large UK e-commerce company that specializes in consumer products, and Knaus Tabbert, Germany's leading leisure vehicles maker, participating in their initial purchase offers.

We own a broad swath of companies in the sector. Our largest industry bets are internet and direct marketing, where we hold ASOS, a leading global online fashion retailer, and Shop Apotheke Europe, an online retailer of pharmaceutical products, and leisure products, where our investments include Mips, a maker of helmets for reducing rotational forces on the brain caused by impacts to the head, and Thule, a Sweden-based company that develops and manufactures sport, outdoor, and cargo products.

  • THG Holdings is poised for strong long-term growth as e-commerce takes a larger share of the retail market. The company has begun licensing its enterprise-focused e-commerce platform that helps retailers and brands build a direct global online channel to consumers. The beauty and nutrition e-commerce businesses are already profitable and expanding rapidly.
  • Knaus-Tabbert has, in our view, a long runway for growth supported by three factors: continued organic market share gains, where the company and current management have an impressive track record over the last decade; the structural growth of the end market, in particular the higher-priced motorhome segment and the core German market; and margin expansion driven by scale and production efficiency.

Health Care

Health care sector remains a key long-term bet that contains some of the portfolio's largest relative and absolute positions. We added Morphosys, a Germany-based biotech company that specializes in the discovery and development of therapeutic antibodies.

Our largest industry allocations are:

  • health care equipment and supplies, where we own Ambu, a Denmark-based provider of diagnostic and life-supporting devices for hospitals and rescue services;
  • biotechnology, where Abcam, a Danish company engaged in producing and marketing research-grade antibodies, is our main investment;
  • life sciences tools and services, where Eurofins Scientific, a leading global provider of bioanalytical laboratory testing services, is our largest holding; and
  • health care providers and services, where we own shares in Amplifon, an Italian company that distributes, adjusts, and personalizes hearing aids.

  • We believe Morphosys and partner Incyte could generate sizable sales from tafasitamab, a drug for treating blood cancer. The U.S. Food and Drug Administration has already approved its use in combination with another drug for the treatment of relapsed or refractory large B-cell lymphoma in adult patients. We believe that it could eventually be more widely used as a front-line treatment.

Communication Services

We further reduced our overweight in communication services, taking some profits in Stillfront, a Sweden-based publisher of digital games, after strong performance and exiting Karnov, a legal information provider that has not fulfilled its promise since its initial public offering last year.

Our largest industry bet is entertainment, where we hold four games developers, one of the fastest-growing segments of the industry. Apart from Stillfront, our investments include Codemasters Group Holdings, a UK-based video game developer and publisher, and Frontier Developments, a world management games specialist.

We are also overweight interactive media and services, where we hold Scout24 Holding, an online classified advertising company that operates mainly in Germany, and the leading UK real estate portal, Rightmove.

Sectors

Total
Sectors
9
Largest Sector Health Care 18.92% Was (30-Nov-2020) 20.27%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI Europe Small Cap Index

Top Contributor^

Communication Services
Net Contribution 0.66%
Sector
-0.02%
Selection 0.68%

Top Detractor^

Industrials & Business Services
Net Contribution -1.06%
Sector
-0.42%
Selection
-0.64%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Health Care
By10.49%
Fund 18.92%
Indicative Benchmark 8.42%

Largest Underweight

Industrials & Business Services
By-12.16%
Fund 13.11%
Indicative Benchmark 25.27%

Monthly Data as of 31-Dec-2020

30-Nov-2020 - Ben Griffiths, Portfolio Manager,
We continued to exit holdings that have failed to meet our expectations or have performed strongly and have little room to rise further. In consumer discretionary, we exited Hellofresh, a Germany-based online provider of meal kits, which we believe has limited room to rise further. However, our exposure to the sector rose because we added a maker of braking systems to the portfolio. We reduced our allocation to consumer staples, exiting Switzerland-based online pharmacy Zur Rose. We believe a similar holding, Shop Apotheke Euroe, will do better.

Countries

Total
Countries
16
Largest Country United Kingdom 42.86% Was (30-Nov-2020) 41.61%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI Europe Small Cap Index

Top Contributor^

Denmark
Net Contribution 0.67%
Country
-0.04%
Selection 0.71%

Top Detractor^

Netherlands
Net Contribution -0.84%
Country
0.02%
Selection
-0.86%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

United Kingdom
By11.19%
Fund 42.86%
Indicative Benchmark 31.67%

Largest Underweight

Sweden
By-6.32%
Fund 7.33%
Indicative Benchmark 13.65%

Monthly Data as of 31-Dec-2020

30-Sep-2018 - Ben Griffiths, Portfolio Manager,
By paring back our position in the aforementioned online payments processor, we reduced our exposure to Germany. Our country positions otherwise did not change materially during the month.

Team (As of 08-Jan-2021)

Benjamin Griffiths

Ben Griffiths is the portfolio manager for the European Smaller Companies Equity Strategy in the International Equity Division, covering European small-cap stocks and co-portfolio manager of the International Small-Cap Equity Strategy.  Ben is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Ben’s investment experience began in 1999, and he has been with T. Rowe Price since 2006, beginning in the Equity Division. Prior to this, Ben was employed by Baillie Gifford as an investment manager. 

Ben earned a B.A. in investment analysis from Stirling University and an M.Eng. in engineering science from Oxford University. Ben also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2016
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    21
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
    10
  • Years investment
    experience
    31

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) 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% 95 basis points 1.05%
Class Q €1,000 €100 €100 0.00% 95 basis points 1.12%

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