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SICAV

Global Growth Equity Fund

Seeking to select superior stocks from the broadest global equity opportunity set.

ISIN LU0382933116 WKN A0RB2L

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

13.05%
$456.2m

1YR Return
(View Total Returns)

Manager Tenure

5.13%
10yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.69
4.17%

Inception Date 27-Oct-2008

Performance figures calculated in USD

Other Literature

31-Aug-2019 - Scott Berg, Portfolio Manager,
We remain cautiously optimistic about global equity markets heading into the second half of this year, although there are a number of challenges. In our view, the world economy is far from a recession; however, failure to resolve the trade conflict between the U.S. and China has the potential to weigh on global growth and is a risk to our outlook. That said, we continue to have a positive view of the companies we own.
R. Scott Berg
R. Scott Berg, Lead Portfolio Manager

Scott Berg is the portfolio manager for the T. Rowe Price Global Growth Equity Strategy and a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook
  • Heading into the second half of 2019, we remain cautiously positive on global equity markets despite multi-dimensional challenges that exist. Entering the year, the two biggest dimensions were global interest rates and the relationship between the two world superpowers, the U.S. and China.
  • On the positive side, monetary expectations have shifted dramatically since the beginning of the year, with the U.S. Federal Reserve now seen as likely to cut interest rates. The dovish tone has spread to other leading central banks including the European Central Bank, which has announced plans for further stimulus if economic conditions deteriorate in the coming months, and the Reserve Bank of Australia, which cut interest rates in early June for the first time since August 2016. We've also seen the Reserve Bank of India lower rates for the third time this year. With the process of normalizing interest rates appearing to break down, we think we are in an even lower interest rate environment for even longer than we had initially anticipated. As an equity investor, the notion of a lower discount rate makes us even more positive on the interest rate dimension.
  • On the trade front, it appeared the U.S. and China were close to a deal, but negotiations sharply deteriorated in early May when China called for substantial changes to a draft trade agreement. The breakdown in talks has had a negative effect on business confidence and capital spending, particularly in export-heavy economies. The rhetoric on the ground in China also worsened both publicly and on the corporate side. While the odds of not resolving the trade dispute with China may have risen, we are not bearish on trade. We think logic still suggests that a deal will get done, but ongoing trade tensions will continue to cause uncertainty in markets, which makes us more cautious.
  • From a portfolio perspective, finding names we like that normally fit our investment process has become more challenging from a valuation standpoint. We have proactively repositioned the portfolio to help reduce beta given our more cautious stance by scaling back our exposure to secular growers, which look somewhat expensive, and adding to consumer staples, real estate, and utilities, which are the clearest and most direct beneficiaries of lower interest rates. With election-related rhetoric on health care intensifying in the U.S., we also pared back our managed care exposure and took profits in several health care names that have performed well. We continue to like our investments in India, Indonesia, the Philippines, Peru, and Vietnam. These remain the most fertile, strongest-growing, demographically driven countries in the world with low debt to GDP and positive real interest rates. In China, our exposure is very purposeful in areas we think can be long-term holds.
  • In our view, the world is far from a recession, but if a trade deal between the U.S. and China is not reached, it's hard to imagine the global economy won't be impacted negatively. While the current investment landscape is a challenging one, we continue to have a positive view on the companies we own and believe our fundamentally driven investment process is well suited to add value for our clients.

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 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 large-cap stocks, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: Typically around 130 holdings.
  • Individual positions: Typically 0.3%-3.0%, maximum 5%
  • Emerging markets exposure: +/- 15% of benchmark
  • Broad sector ranges: +/- 10% of benchmark
  • Country ranges: +/- 10% of benchmark (USA is +/- 20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%
  • Expected tracking error: 300 to 700 basis points

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 5.13% 13.05% 9.53% 10.16% 14.73%
Indicative Benchmark % 1.38% 9.71% 6.65% 8.35% 11.28%
Excess Return % 3.75% 3.34% 2.88% 1.81% 3.45%

Inception Date 27-Oct-2008

Manager Inception Date 27-Oct-2008

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 % 5.13% 13.05% 9.53% 10.16%
Indicative Benchmark % 1.38% 9.71% 6.65% 8.35%
Excess Return % 3.75% 3.34% 2.88% 1.81%

Inception Date 27-Oct-2008

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 09-Oct-2019 Quarter to DateData as of 09-Oct-2019 Year to DateData as of 09-Oct-2019 1 MonthData as of 30-Sep-2019 3 MonthsData as of 30-Sep-2019
Fund % -1.94% -1.94% 17.20% 0.29% -1.17%
Indicative Benchmark % -1.78% -1.78% 14.13% 2.10% -0.03%
Excess Return % -0.16% -0.16% 3.07% -1.81% -1.14%

Inception Date 27-Oct-2008

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. 

31-Aug-2019 - Scott Berg, Portfolio Manager,
Global equities pulled back in August as escalating trade tensions and weak economic data ignited fears of slowing global growth and recession. At the portfolio level, stock selection in the consumer discretionary space hurt relative returns the most. For example, shares of Farfetch, the online luxury fashion marketplace, fell over the month. While the company reported generally solid earnings results, profitability remained weak, which unnerved investors. We continue to believe Farfetch is a unique platform that can capitalise on the growth of the luxury market and the shift online. On the positive side, holdings in the materials sector helped relative performance. Shares of fibre cement siding manufacturer James Hardie Industries spiked in August after reporting strong quarterly results that demonstrated early progress on market share gains and cost cutting momentum. Investors also viewed the firm as a likely beneficiary of a potential boost for the U.S. housing market from falling interest rates. We think James Hardie is well positioned to benefit from continued recovery in its end markets, market share gains, price increases, and manufacturing efficiencies. At the regional level, holdings in developed Europe weighed on relative results. On the positive side, stock selection in emerging markets boosted performance, although this was somewhat muted by the negative effect of our overweight here.

Holdings

Total
Holdings
161
Largest Holding Amazon.com 3.04% Was (31-Mar-2019) 2.96%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 17.60% View Top 10 Holdings Monthly data as of 30-Sep-2019

Largest Top Contributor^

Amazon.com
By 0.81%
% of fund 3.01%

Largest Top Detractor^

Alphabet
By -0.75%
% of fund 3.03%

^Absolute

Quarterly Data as of 30-Jun-2019

Top Purchase

EssilorLuxottica (N)
0.75%
Was (31-Mar-2019) 0.00%

Top Sale

Altaba (E)
0.00%
Was (31-Mar-2019) 1.18%

Quarterly Data as of 30-Jun-2019

30-Jun-2019 - Scott Berg, 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. Over the quarter, the portfolio's exposure increased to the communication services, consumer staples, and information technology sectors, while exposure decreased in health care and financials. Regionally, our allocation to the Pacific ex-Japan increased, while exposure to North America decreased. Within emerging markets, we continue to favor what we consider the more fertile and demographically advantaged regions, such as China, India, Indonesia, the Philippines, Peru, and Vietnam.

Communication Services

Amid the changing media, entertainment, and communications landscape, certain sector names benefit from strong user engagement and/or subscriber growth. Due to limited opportunities for strong growth in legacy telecommunications companies, our focus is on highly innovative, secular growers within the entertainment and internet services spaces that are on the right side of change.

  • We added to our position in global search leader Alphabet. With its world-class computing infrastructure and elite engineering and data science capabilities, we think Alphabet is well placed to extract value from the economy as the world becomes increasingly digital.
  • We initiated a position in Tencent Music Entertainment, the dominant player in China's online music industry, when a recent pullback offered an attractive entry point. With over 600 million users, monetization opportunities are large from music subscription, selling online music content, user's tipping to music-related live streaming hosts, and payment for online karaoke services. Tencent Holdings is the controlling stakeholder of Tencent Music Entertainment.

Consumer Discretionary

Our holdings in consumer discretionary are diversified across industries and geographies. However, many of our holdings have a strong presence in online retail and/or exposure to emerging markets with attractive demographics.

  • EssilorLuxottica is the newly formed combined entity of two leading eyewear makers into a single, dominant global leader in a secularly advantaged industry. We think the firm is well positioned to take advantage of the move toward more complex eyewear, which should prove to be higher-margin products, as well as increasing penetration into emerging markets. The stock had pulled back in recent months, making valuation more interesting and providing an attractive entry point.
  • Altaba, the investment company left over after the 2016 merger of Yahoo and Verizon, announced in April that it was seeking shareholder approval for liquidation and dissolution. The primary holding of Altaba is a stake in Chinese internet giant Alibaba Group Holding. Given that Altaba's share price is now less attractive relative to the underlying value of the Alibaba holding, we eliminated our holding in Altaba in favor of adding to Alibaba directly.
  • We added to our position in Alibaba Group Holdings, China's dominant e-commerce platform. We continue to have high conviction in Alibaba given its combination of e-commerce dominance and hypergrowth cloud business. Additionally, the benefits from its ownership stake in Ant Financial make it a very strong and durable platform with multiple compelling avenues to value creation.

Health Care

Our holdings are tilted toward drugmakers with strong pipelines, equipment makers with significant technology advantages, and health care providers that should benefit from increasing memberships as well as the ongoing trend of lower health care utilization in the U.S. In addition, we think there is tremendous growth and innovation happening in China with regard to health care and own several high-quality names in the region.

  • Services names have been pressured by increased political rhetoric around health care reform proposals. While the fundamental earnings backdrop for these companies remains robust, the continued and growing sentiment overhang on the group led us to exit our position in WellCare Health Plans and trim our exposure to UnitedHealth Group.
  • As part of upping the quality of the Chinese names we hold, we moved on from health care firm BeiGene, choosing to put more emphasis on the other names in the sector that we believe offer higher-quality returns.

Information Technology

We continue to believe that innovations in artificial intelligence (AI) are not only affecting technology companies, but also reshaping more traditional industries, ones viewed as less susceptible to business model disruption. We remain positioned to benefit from increasing AI adoption and application as well as the ongoing transition toward greater computing mobility, increasing use of the Web, and growing technology consumption in emerging markets. As a result, our holdings are tilted toward payment and cloud software companies.

  • We bought Atlassian, an enterprise software company that provides both on-premises and cloud-based collaboration and workflow software and services. We think Atlassian is a well-managed, secularly advantaged software company with a disruptive business model that has a long and durable growth runway.
  • We initiated a position in Amphenol as a recent stock pullback offered a compelling entry point to this high-quality company. Amphenol is an industrial supplier of sensors, cables, and connectors to a broad diversity of attractive and growing end markets including military, telecommunications, and automotive applications. Decentralized and entrepreneurial business management fosters a competitively advantaged, industry-specific approach to its numerous end markets. Growth is supported by secular tailwinds such as the increasing trend toward connectivity and the growing Internet of Things. Amphenol also has a proven track record of solid capital allocation and successful M&A, which should prove beneficial given the low current cost of capital.
  • While we maintain a favorable long-term view of NVIDIA, transient issues including central processing unit shortages and data center weakness may weigh on the stock in the near term, so we exited our position.

Industrials and Business Services

We are focused on high-quality companies that can benefit from multiyear growth trends and increases in global trade and capital spending. We are attracted to less cyclical, durable earnings growers in industries with attractive growth dynamics and seek to avoid companies with commodity capital expenditures exposure.

  • We eliminated our position in diversified industrials firm Illinois Tool Works. We think the risk/reward has become less favorable and that earnings and the multiple may be pressured by moderating demand due to lower levels of auto builds and industrial activity in China and Europe as well as weakening private nonresidential spend in North America. We directed the proceeds into a new holding in Amphenol.
  • We sold out of our stake in building products supplier Fortune Brands Home & Security. Although the firm's recent earnings were above consensus, we feel that there is limited upside remaining in the stock and are choosing to reallocate funds to opportunities with more attractive potential.

Sectors

Total
Sectors
11
Largest Sector Information Technology 18.23% Was (31-Aug-2019) 17.79%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Materials
Net Contribution 0.44%
Sector
0.08%
Selection 0.36%

Top Detractor^

Consumer Discretionary
Net Contribution -1.08%
Sector
-0.01%
Selection
-1.07%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Consumer Discretionary
By2.98%
Fund 13.82%
Indicative Benchmark 10.84%

Largest Underweight

Energy
By-3.48%
Fund 1.98%
Indicative Benchmark 5.46%

Monthly Data as of 30-Sep-2019

31-Aug-2019 - Scott Berg, Portfolio Manager,
Our outlook for the energy sector remains subdued given the global oversupply of oil. The recent extension of the OPEC production cuts may help keep oil prices from collapsing, but overall we do not see the cut in production as a reason to be bullish. We expect the surge in U.S. shale oil production and productivity may continue to drive oversupply for some time to come. Our focus in the sector is on companies with high-quality balance sheets, low-cost production, and relatively good production growth profiles.

Countries

Total
Countries
29
Largest Country United States 46.07% Was (31-Aug-2019) 47.23%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

India
By5.84%
Fund 6.85%
Indicative Benchmark 1.02%

Largest Underweight

United States
By-9.56%
Fund 46.07%
Indicative Benchmark 55.63%

Monthly Data as of 30-Sep-2019

Currency

Total
Currencies
22
Largest Currency U.S. dollar 57.20% Was (31-Aug-2019) 59.83%
Other View complete Currency Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

Indian rupee
By 5.92%
Fund 6.94%
Indicative Benchmark 1.02%

Largest Underweight

Japanese yen
By -5.95%
Fund 1.31%
Indicative Benchmark 7.27%

Monthly Data as of 30-Sep-2019

Team (As of 31-Aug-2019)

R. Scott Berg

Scott Berg is the portfolio manager for the T. Rowe Price Global Growth Equity Strategy and a vice president of T. Rowe Price Group, Inc.

Mr. Berg has 17 years of investment experience, all of which have been with T. Rowe Price. He joined the firm in 2002 as a research analyst covering the business services sector after serving as a summer intern in 2001. In 2005, he joined the global equity team as an associate portfolio manager and in 2008 launched the Global Growth Equity Strategy. Prior to T. Rowe Price, he was the manager of financial analysis and planning for Mead Consumer and Office Products. Previously, Mr. Berg was also employed by McKinsey & Company as a business analyst and was a core team member on the firm's global growth initiative.

Mr. Berg graduated first in his class from Macquarie University in Australia, with a B.Ec. in actuarial studies and finance. He also holds an M.B.A. from the Stanford Graduate School of Business, where he again graduated at the top of his class. Mr. Berg has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2008
  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    17
Harishankar Balkrishna

Hari Balkrishna is an associate portfolio manager for the Global Growth Equity Strategy in the Equity Division of T. Rowe Price. Mr. Balkrishna is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Balkrishna has 12 years of investment experience. He completed an internship at T. Rowe Price in 2009. Prior to joining the firm in 2010, he worked at Goldman Sachs, Sydney, Australia, in the financial institutions group of the Investment Banking Division.

Mr. Balkrishna has a bachelor of commerce in finance and accounting (university medal and first-class honours) from the University of New South Wales and also has earned an M.B.A., with distinction, from Harvard Business School.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    9
  • Years investment
    experience
    12
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 0.82%
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.07%

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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