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SICAV

Global Focused Growth Equity Fund

Concentrating high conviction positions in leading global investment prospects.

ISIN LU0143563046 WKN 541556

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

14.29%
$1.8b

1YR Return
(View Total Returns)

Manager Tenure

2.80%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.88
5.77%

Inception Date 12-Jan-2006

Performance figures calculated in USD

Other Literature

30-Sep-2019 - David J. Eiswert, Portfolio Manager,
We believe the global economy is heading towards a crossroads. This is particularly true for the regulatory landscape for some big technology companies and U.S.-China trade relations. As such, we have been attempting to position the portfolio in such a way that we can participate in a rally driven by any positive resolutions (such as a trade deal) while dampening the negative effects of any deteriorating factors.
David J. Eiswert
David J. Eiswert, Lead Portfolio Manager

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert 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 that have the potential for above average and sustainable rates of earnings growth. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Single decision maker provides clear accountability.
  • Identify “best ideas” by assessing companies in a global sector context, using bottom-up approach to create focused, high- conviction portfolio.
  • Global research platform uses fundamental analysis to identify companies with superior and sustainable growth prospects, and improving fundamentals.
  • Macroeconomic and local market factors are integrated in stock selection decisions.
  • Valuation appeal is measured against local market and broad sector opportunity set.
  • Broad range of stocks across all capitalizations, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: typically 60-80 stocks
  • Individual positions: Typically 0.5%-5.0%
  • Emerging markets exposure: +/-15% of benchmark
  • Broad sector ranges: +/-15% of benchmark
  • Country ranges: +/-10% of benchmark (U.S.A. is +/-20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%, Maximum 10%
  • Expected tracking error: 400 to 800 basis points

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 2.80% 14.29% 11.74% 11.44% 13.93%
Indicative Benchmark % 1.38% 9.71% 6.65% 8.35% 8.83%
Excess Return % 1.42% 4.58% 5.09% 3.09% 5.10%

Inception Date 12-Jan-2006

Manager Inception Date 30-Sep-2012

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Sep-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 2.80% 14.29% 11.74% 11.44%
Indicative Benchmark % 1.38% 9.71% 6.65% 8.35%
Excess Return % 1.42% 4.58% 5.09% 3.09%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 21-Oct-2019 Quarter to DateData as of 21-Oct-2019 Year to DateData as of 21-Oct-2019 1 MonthData as of 30-Sep-2019 3 MonthsData as of 30-Sep-2019
Fund % 1.71% 1.71% 21.85% -0.35% -0.77%
Indicative Benchmark % 1.57% 1.57% 18.02% 2.10% -0.03%
Excess Return % 0.14% 0.14% 3.83% -2.45% -0.74%

Inception Date 12-Jan-2006

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country World 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. 

30-Sep-2019 - David J. Eiswert, Portfolio Manager,
Global equities rose in September as U.S.-China trade tensions appeared to ease and global central banks took measures to stimulate economic growth. At the portfolio level, our investments in health care weighed the most on relative performance. Biopharmaceutical firm SAGE Therapeutics fell with the broader health care sector. We think the potential success of its drugs for postpartum depression and major depressive disorders could be transformative for the firm. On the positive side, stock selection in materials boosted relative results. Fiber cement siding manufacturer James Hardie Industries rose as U.S. housing demand picked up and the U.S. Federal Reserve cut interest rates. We think James Hardie is poised for accelerating growth due to market share gain, price increases, and manufacturing efficiencies. At the regional level, our holdings in North America weighed on relative performance, while developed Asia Pacific ex-Japan names helped.

Holdings

Total
Holdings
78
Largest Holding JPMorgan Chase 3.02% Was (30-Jun-2019) 1.78%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 24.38% View Top 10 Holdings Monthly data as of 30-Sep-2019

Largest Top Contributor^

JPMorgan Chase
By 0.23%
% of fund 3.01%

Largest Top Detractor^

Netflix
By -0.10%
% of fund 2.09%

^Absolute

Quarterly Data as of 30-Sep-2019

Top Purchase

Alcon
2.01%
Was (30-Jun-2019) 0.53%

Top Sale

Essity (E)
0.00%
Was (30-Jun-2019) 2.84%

Quarterly Data as of 30-Sep-2019

30-Jun-2019 - David J. Eiswert, Portfolio Manager,

As always, our trading activity during the quarter was driven from the bottom up. The portfolio's sector and region allocations are driven primarily by individual stock considerations but are also influenced, to a lesser degree, by an assessment of macroeconomic and geopolitical considerations. Sector-wise, our allocations to information technology and utilities increased, while financials and consumer staples decreased. Regionally, our exposure to Pacific ex-Japan increased, while our allocation to Latin America decreased.

Information Technology

We have a high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. We look for innovative companies with the potential to be true market disruptors. The shifts toward greater connectivity, mobility, and use of cloud software applications are powerful long-term trends, and the markets for consumer and enterprise technology products are expanding in all regions. Rapid growth in the use of the internet, particularly in Asia, has yielded many compelling stories with long runways for growth. We also have a sizable exposure to semiconductor stocks that are trading at attractive valuations and should benefit from content growth in the automotive and industrial end markets as well as investment in data centers and artificial intelligence.

  • We found a compelling reentry point in semiconductor manufacturer Texas Instruments following the company's issuance of weaker-than-anticipated guidance for the upcoming quarter. We believe this to be a high-quality business with favorable long-term prospects given its potential to benefit from a consolidating industry structure, early-stage product demand cycles, and the possibility of a recovery in global capital expenditures.
  • We took advantage of recent share price weakness to increase our position in Samsung Electronics. Ongoing weakness in memory prices and a maturing smartphone market have pressured revenues and profit margins. However, this pain has led Samsung Electronics and other memory suppliers to cut their capital expenditures, which, along with the potential for stepped-up data center spending later this year, should help to set the stage for a recovery cycle. Over the longer term, we expect Samsung Electronics to benefit from a consolidated DRAM industry and a favorable demand outlook, with growth driven by cloud computing, artificial intelligence, video games, streaming video, and other opportunities.

Consumer Discretionary

The consumer discretionary sector has become increasingly challenged as market disruption, driven in part by rapid changes in consumer behavior and e-commerce, has led to a more dramatic demarcation between winners and losers. The "winners" in the sector are becoming increasingly crowded investments, and, thus, it has become more difficult to find opportunities where we feel we have unique insights into improving returns. Given the polarized structure of the sector, our focus is on high-quality names that are on the right side of change and have dominant market positions. We find internet-based media and select retailing companies particularly attractive, but most of our holdings are driven by product-specific stories.

  • We established a position in Ross Stores, the second-largest off-price retailer in the U.S. We expect topline growth to be driven by a combination of square-footage expansion, as the company executes on its plan to double its store base, as well as continued solid same-store sales growth, especially as the company is on track to fix issues in its key ladies apparel segment. Furthermore, Ross Stores is a strong cash generator, and we expect the company to continue to return capital to shareholders via dividends and share repurchases.
  • We initiated a position in Galaxy Entertainment, one of the largest casino operators in Macau. Its flagship property, Galaxy Macau, is a high-demand destination, and it has multiple projects set to open within the next couple of years. Bolstered by the combination of large-capacity expansion, industry-leading operational performance and consumer demand, and relatively low policy risk, we believe Galaxy is well positioned to benefit from a reacceleration in the Macau gaming industry.
  • Despite posting solid numbers so far this year, we sold out of our holding in Chinese consumer home appliance manufacturer Midea. Given concerns over China's weaker macro outlook, we felt there were better opportunities elsewhere.
  • Shares of Lojas Renner, the second-largest apparel store chain in Brazil, rallied as the economic environment in the country continued to improve. We exited the position on strength, as valuation became more expensive.

Financials

Recent headwinds, including the slowing pace of interest rate increases and subdued housing demand in the U.S., pose challenges for the sector. Within financials, we like high-quality capital market firms, security exchanges, and select emerging market banks that we think are undervalued and underappreciated.

  • We exited the portfolio's position in Itau Unibanco Holding, the largest private sector bank in Brazil, amid a generally more cautious outlook for loan growth this year, given the weaker-than-expected macro environment.
  • We scaled back our position in CME Group, the world's largest derivatives exchange by market capitalization and volume, on strength. While we continue to think CME Group can continue to expand its global customer base and product offerings and view it as a major beneficiary from the ongoing electronification of options trading, we chose to moderate our exposure as valuation appears fuller.
  • Hong Kong-based AIA Group mainly sells insurance to individuals with exposure across several fast-growing, structurally attractive ASEAN markets, China in particular, where life insurance penetration is very low to date. We initiated a position as we believe the firm offers the potential for durable, resilient growth and can continue to increase earnings and margins over time. We think AIA is a unique asset backed by a strong management team focused on successful execution. The company is well capitalized with a significant and growing excess capital position offering additional optionality.

Health Care

Health care remains a fertile area for growth potential and accelerating technological discovery. Our focus is on companies that are key disrupters and innovators in the field, particularly in the medical technology and biopharma spaces as well as companies where we have particular insight into key drivers of their durable growth.

  • We added to our position in medical and industrial product company Danaher. Danaher recently announced that it would buy GE's biopharma business, which sells supplies and equipment for developing and producing biologic drugs. While Danaher is already highly diversified in many growth areas of technology, we believe the acquisition will provide it with a robust innovation pipeline and favorable exposure to specific therapeutic assets and programs.
  • We exited our position in life sciences company Illumina on recent strength. The stock has performed well on the back of strong demand for gene sequencing, and we chose to allocate our exposure to more compelling ideas elsewhere.
  • Given the continued and growing sentiment overhang on Cigna and other managed care names due to increased political rhetoric around health care reform proposals in the U.S., we chose to exit our position.
  • We eliminated our position in Vertex Pharmaceuticals, a commercial-stage biotech company that is developing drugs for cystic fibrosis. With no near-term clinical catalysts to drive the stock higher, we chose to move on from our position.

Sectors

Total
Sectors
11
Largest Sector Information Technology 30.73% Was (31-Aug-2019) 28.57%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Materials
Net Contribution 0.58%
Sector
0.13%
Selection 0.46%

Top Detractor^

Communication Services
Net Contribution -0.74%
Sector
0.06%
Selection
-0.80%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Information Technology
By14.41%
Fund 30.73%
Indicative Benchmark 16.32%

Largest Underweight

Consumer Staples
By-7.12%
Fund 1.51%
Indicative Benchmark 8.63%

Monthly Data as of 30-Sep-2019

30-Sep-2019 - David J. Eiswert, Portfolio Manager,
We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. That said, increasing regulatory scrutiny and concerns about privacy have been a cloud over the big internet companies in recent months, and we are managing our position sizes in light of these risks. We look for innovative companies with the potential to be true market disruptors. The shifts toward greater connectivity, mobility, and use of cloud software applications are powerful long-term trends, and the markets for consumer and enterprise technology products are expanding in all regions.

Countries

Total
Countries
20
Largest Country United States 50.42% Was (31-Aug-2019) 53.22%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

China
By3.21%
Fund 6.88%
Indicative Benchmark 3.68%

Largest Underweight

United States
By-5.21%
Fund 50.42%
Indicative Benchmark 55.63%

Monthly Data as of 30-Sep-2019

Currency

Total
Currencies
14
Largest Currency U.S. dollar 62.09% Was (31-Aug-2019) 64.30%
Other View complete Currency Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

U.S. dollar
By 4.97%
Fund 62.09%
Indicative Benchmark 57.12%

Largest Underweight

Canadian dollar
By -3.08%
Fund 0.00%
Indicative Benchmark 3.08%

Monthly Data as of 30-Sep-2019

Team (As of 31-Aug-2019)

David J. Eiswert

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Mr. Eiswert has 19 years of investment experience, 16 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst at Mellon Growth Advisors and Fidelity Management and Research. He also worked as a consultant in the communications industry.

Mr. Eiswert earned a B.A., summa cum laude, in economics and political science from St. Mary's College of Maryland and an M.A. in economics from the University of Maryland, College Park. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    19
Josh Nelson

Josh  Nelson is a director of research in the U.S. Equity Department of T. Rowe Price. Previously, he was an associate portfolio manager for the Global Focused Growth Equity Strategy. He is on the Investment Advisory Committee of the Global Stock Strategy. He also serves on the Equity Steering Committee. Mr. Nelson is a vice president of T. Rowe Price Group, Inc.

Mr. Nelson has 17 years of investment experience, two of which have been with T. Rowe Price. He served as a summer intern with T. Rowe Price in 2006, covering agricultural commodities and ethanol companies. Prior to joining the firm in 2007, he was an investment banker for Citigroup Global Markets, Inc. 

Mr. Nelson earned a B.S., with honors, in industrial systems and engineering from the University of Florida. He also earned an M.B.A., with honors, in finance from The Wharton School, University of Pennsylvania.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    17
Kurt A.  Umbarger

Kurt Umbarger is the regional head of the Equity Investment Specialist Group of T. Rowe Price. Previously, he was a global equity portfolio specialist in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Umbarger has 26 years of investment experience, all of which have been at T. Rowe Price. He joined the firm in 1992 and has been a portfolio specialist since 2001.  Prior to joining the global equity team in 2005, Mr. Umbarger worked with the international and emerging market equity teams. As a portfolio specialist, he has traveled the world, working closely with institutional clients, consultants, and prospects.

Mr. Umbarger earned a B.S. in finance from Towson University and an M.S.F. in finance from Loyola University Maryland. He also has earned the Chartered Financial Analyst designation and is a Series 6, 7, 63, and 65 registered representative.

  • Years at
    T. Rowe Price
    26
  • Years investment
    experience
    26
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    19

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 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.81%
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92%

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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