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SICAV

Global Value Equity Fund

Targeting attractively valued global companies with prospects for improving earnings growth.

ISIN LU0859255472 WKN A1T64M

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

7.22%
$38.2m

1YR Return
(View Total Returns)

Manager Tenure

-0.27%
6yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.57
3.21%

Inception Date 28-Nov-2012

Performance figures calculated in USD

Other Literature

30-Sep-2019 - Sebastien Mallet, Portfolio Manager,
Widening valuation spreads are creating some attractive opportunities for value investors in the short term. The sustainability of this recent trend toward value stocks remains to be seen but does provide some evidence that headwinds to a world where value outperforms growth are dissipating and that valuations are regaining importance. Against this backdrop, we are finding many pockets of controversy where fundamentally sound, well-run businesses face unwarranted investor scepticism.
Sebastien Mallet
Sebastien Mallet, Portfolio Manager

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet 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 widely diversified portfolio of undervalued stocks of companies anywhere in the world, including emerging markets.

Investment Approach

  • Diversified portfolio investing in companies located throughout the globe.
  • Emphasize attractively valued companies with prospects for improving earnings growth.
  • Employ rigorous and comprehensive research to identify and assess investment opportunities.
  • Allocate country and sector positions through consideration of:
    • Attractiveness of individual investments
    • Macroeconomic environment

Portfolio Construction

  • Typically 80-100 stock portfolio
  • Individual positions typically range from 0.30% to 3.00% — average position size of 1.00%
  • Country and sector weights generally range +/- 15% deviation from the benchmark
  • Maximum of 10% in emerging markets
  • Reserves range from 0% to 10%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % -0.27% 7.22% 5.34% 9.46% 9.46%
Indicative Benchmark % 1.83% 10.21% 7.18% 9.96% 9.96%
Excess Return % -2.10% -2.99% -1.84% -0.50% -0.50%

Inception Date 28-Nov-2012

Manager Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  30-Sep-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -0.27% 7.22% 5.34% 9.46%
Indicative Benchmark % 1.83% 10.21% 7.18% 9.96%
Excess Return % -2.10% -2.99% -1.84% -0.50%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI 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 % 1.29% 1.29% 17.14% 2.77% 1.37%
Indicative Benchmark % 1.41% 1.41% 19.26% 2.13% 0.53%
Excess Return % -0.12% -0.12% -2.12% 0.64% 0.84%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Indicative Benchmark: MSCI 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 - Sebastien Mallet, Portfolio Manager,
Global equity markets gained ground in September, with value stocks outperforming their growth peers, as concerns over China-U.S. trade talks and the realisation that U.S. stimulus is now fading led some investors into more defensive areas of the market, away from cyclicals. The month began amid growing optimism that progress would be made in the U.S.-China trade dispute, while mixed economic data releases generally appeared to support sentiment. Towards the end of the month, however, stocks turned lower as global trade tensions intensified. At the portfolio level, the information technology (IT) sector was a significant source of absolute and relative performance. This was due to share price rises from several of our semiconductor-related names. The semiconductor sector as a whole has performed well in the year to date, despite the trade tensions between the U.S. and China. The market is anticipating that the sector is bottoming and that demand for chips will pick up in 2020 as a result of the 5G network being rolled out. In addition, as suppliers to Apple, many of these companies stand to benefit from the positive reaction to Apple’s newest iPhone 11.

Holdings

Total
Holdings
93
Largest Holding JPMorgan Chase 2.98% Was (30-Jun-2019) 2.54%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 22.35% View Top 10 Holdings Monthly data as of 30-Sep-2019

Largest Top Contributor^

JPMorgan Chase
By 0.41%
% of fund 2.97%

Largest Top Detractor^

GE
By -0.08%
% of fund 1.75%

^Absolute

Quarterly Data as of 30-Sep-2019

Top Purchase

Edison International (N)
1.12%
Was (30-Jun-2019) 0.00%

Top Sale

Verizon Communications (E)
0.00%
Was (30-Jun-2019) 1.96%

Quarterly Data as of 30-Sep-2019

30-Jun-2019 - Sebastien Mallet, Portfolio Manager,

Having held an underweight position to real estate, we raised the portfolio's exposure through new positions in the U.S. and Japan over the quarter. We also moved further overweight to financials, finding an opportunity in a large U.S. bank. We retained our underweight to IT but, within this, made a number of switches to our holdings. Within the health care sector, we reduced our exposure to the U.S. managed care space. Our major overweight sector positions at the end of June remained financials, utilities, and, to a smaller extent, health care. The largest underweight sector positions included consumer discretionary, IT, and communication services.

Closed Underweight to Real Estate

As the review period began, the portfolio had a longstanding underweight in real estate. Over the course of the quarter, we added exposure by initiating positions in Equity Residential and Mitsui Fudosan Logistics.

  • Equity Residential: This company is the largest publicly traded U.S. apartment REIT. With its high-quality, bicoastal urban assets, the portfolio is, in our view, hard to replicate and is run by a strong operating team. We see long-term value accretion being driven by management that knows how to allocate, while a strong balance sheet provides additional downside protection.

  • Mitsui Fudosan Logistics: We see a decent growth runway from here for this Japanese real estate developer, thanks to its top-tier leasing portfolio and extensive pipeline, while low leverage and broad scope for acquisitions is of additional support. We also like the stock for its solid dividend.

Sold Managed Care Exposure Due to U.S. Election Risk

We eliminated our positions in two U.S.-based managed care companies, UnitedHealth Group and Anthem, over the course of the review period. In our view, their businesses are materially exposed to what could be a long election overhang, and we see risk of multiple compression under several election scenarios.

Although these trades reduced exposure to the broader health care sector, the portfolio retains an overweight position.

Identified an Opportunity in a U.S. Bank

Over the course of the quarter ended in June, we moved further overweight to financials. We initiated a position in Bank of America, taking advantage of its attractive valuation. Management at the large U.S. bank has done well to navigate several headwinds and protect profitability in the continued low-rate environment. The bank is also being savvy about appealing to younger customers, which should feed into longer-term deposit growth.

Switched Holdings Within IT

Over the course of the review period, the overall weighting of the portfolio in the IT sector remained broadly unchanged. However, within the sector, we made a number of switches to reflect our evolving view. We initiated a position in Qualcomm, funding this in part by selling out of our holdings in Booz Allen Hamilton and TDK.

  • Qualcomm: We like this U.S. semiconductor and telecommunications equipment business, which trades at an attractive valuation relative to the extent of its earnings power. We view Qualcomm as the leading 5G modem manufacturer in an improving industry structure, where the recent exit of a key competitor has multiplied the company's market share.

  • Booz Allen Hamilton: Our position in this U.S. management consultancy business played out well during our holding period, but we now see increased risk in the form of a bribery investigation, and its fuller valuation no longer befits our model.

  • TDK: We exited our position in this Japanese electronics conglomerate after owning the stock for a couple of years. TDK's battery business has been a key driver of share price performance, but we see the product cycle being less conducive from here. We are also wary of increasing debt levels, which has dampened our view of the stock's risk/ reward profile.

Sectors

Total
Sectors
11
Largest Sector Financials 24.94% Was (31-Aug-2019) 23.47%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI World Index

Top Contributor^

Utilities
Net Contribution 0.62%
Sector
0.33%
Selection 0.29%

Top Detractor^

Consumer Staples
Net Contribution -0.27%
Sector
-0.07%
Selection
-0.20%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Financials
By9.25%
Fund 24.94%
Indicative Benchmark 15.70%

Largest Underweight

Consumer Discretionary
By-6.67%
Fund 3.88%
Indicative Benchmark 10.55%

Monthly Data as of 30-Sep-2019

30-Sep-2019 - Sebastien Mallet, Portfolio Manager,
Financials and utilities remain the portfolio’s largest relative overweight positions while key underweights are consumer discretionary, communication services, IT and consumer staples. In September we raised our exposure to the industrials and business services sector, initiating a position in a parcel delivery service company as we believe that it is making the required changes to address the unprofitability in its business-to-consumer (B2C) volumes. In our view, this should arrest the domestic margin decline and provide a free call option on improvement.

Regions

Total
Regions
4
Largest Region North America 60.45% Was (31-Aug-2019) 61.80%
Other View complete Region Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI World Index

Top Contributor^

United States
Net Contribution 0.76%
Region
-0.05%
Selection 0.81%

Top Detractor^

Japan
Net Contribution -0.09%
Region
0.01%
Selection
-0.10%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Europe
By3.22%
Fund 24.35%
Indicative Benchmark 21.14%

Largest Underweight

North America
By-5.89%
Fund 60.45%
Indicative Benchmark 66.34%

Monthly Data as of 30-Sep-2019

Countries

Total
Countries
20
Largest Country United States 55.87% Was (31-Aug-2019) 57.40%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2019

Indicative Benchmark: MSCI World Index

Largest Overweight

China
By3.16%
Fund 3.17%
Indicative Benchmark 0.01%

Largest Underweight

United States
By-6.98%
Fund 55.87%
Indicative Benchmark 62.86%

Monthly Data as of 30-Sep-2019

Team (As of 31-Aug-2019)

Sebastien Mallet

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Mallet has 19 years of investment experience, 14 of which have been at T. Rowe Price. Prior to joining the firm in 2005, he was a telecom banker at Credit Suisse First Boston in the Tokyo and London offices. Mr. Mallet started his career as a financial analyst with France Telecom, based in Guangzhou, China, and Madrid, Spain.

Mr. Mallet earned an M.A., with honours, in finance from the University of Paris and an M.B.A. from the London Business School.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    18

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $15,000 $100 $100 5.00% 160 basis points 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.85%
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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