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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)

8.41%
$44.9m

1YR Return
(View Total Returns)

Manager Tenure

25.12%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.74
3.10%

Inception Date 28-Nov-2012

Performance figures calculated in USD

Other Literature

31-Dec-2019 - Sebastien Mallet, Portfolio Manager,
We believe that value stocks have shown some signs of coming back into favour in recent months and widening valuation spreads are creating some attractive opportunities for us in the short term. The sustainability of this recent trend remains to be seen, but it does suggest that headwinds to a world where value outperforms growth are dissipating, and that valuations are regaining importance.
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 % 25.12% 8.41% 6.44% 10.32% 10.32%
Indicative Benchmark % 27.67% 12.57% 8.74% 10.86% 10.86%
Excess Return % -2.55% -4.16% -2.30% -0.54% -0.54%

Inception Date 28-Nov-2012

Manager Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  31-Dec-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 25.12% 8.41% 6.44% 10.32%
Indicative Benchmark % 27.67% 12.57% 8.74% 10.86%
Excess Return % -2.55% -4.16% -2.30% -0.54%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of  31-Dec-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Jan-2020 Quarter to DateData as of 15-Jan-2020 Year to DateData as of 15-Jan-2020 1 MonthData as of 31-Dec-2019 3 MonthsData as of 31-Dec-2019
Fund % 1.25% 1.25% 1.25% 2.82% 8.19%
Indicative Benchmark % 1.47% 1.47% 1.47% 3.00% 8.56%
Excess Return % -0.22% -0.22% -0.22% -0.18% -0.37%

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. 

31-Dec-2019 - Sebastien Mallet, Portfolio Manager,
December saw global equity markets continue to build on the gains of recent months. Sentiment was greatly boosted by optimism that the signing of a “phase one” trade deal between China and the U.S. was imminent. In Europe, Brexit uncertainty eased following the decisive general election victory for the Conservatives. At newly elected President Christine Lagarde’s first policy meeting, the European Central Bank (ECB) kept its ultra-easy monetary policy stance and bond-buying programme unchanged due to the subdued inflation outlook, noting that risks remain tilted to the downside but had become less pronounced. In China, industrial production and factory activity survey data were both stronger than expected but the country’s statistics bureau cautioned that current downward pressure on the economy is significant. At the portfolio level, our stock selection within the information technology (IT) and energy sectors added value. In particular, our holdings in a number of semiconductor-related stocks contributed significantly to returns as the highly cyclical sector rallied sharply on expectations of a recovery in global demand and prices, and a normalisation of inventories. By contrast, our choice of securities within the industrials and business services space dragged.

Holdings

Total
Holdings
94
Largest Holding JPMorgan Chase 3.22% Was (30-Sep-2019) 2.98%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 21.59% View Top 10 Holdings Monthly data as of 31-Dec-2019

Largest Top Contributor^

JPMorgan Chase
By 0.81%
% of fund 3.22%

Largest Top Detractor^

American International Group
By -0.50%
% of fund 1.70%

^Absolute

Quarterly Data as of 31-Dec-2019

Top Purchase

Verizon Communications (N)
1.74%
Was (30-Sep-2019) 0.00%

Top Sale

Cisco Systems (E)
0.00%
Was (30-Sep-2019) 1.51%

Quarterly Data as of 31-Dec-2019

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

Our major overweight sector positions at the end of September were financials and utilities. The largest underweight sector positions included consumer discretionary, communication services, IT, and consumer staples.

Over the course of the third quarter, we continued to identify new opportunities in utilities and real estate, increasing our overall weightings to both sectors. We initiated a position in a parcel delivery company, which resulted in a larger overall exposure to the broad industrials and business services sector. Having entered the quarter with an overweight stance in the health care sector, we moved to underweight as a result of our concerns regarding revenue concentration in one of the portfolio's major holdings. We moved further underweight consumer staples as a result of what we believe are increased headwinds within the tobacco industry. Within the IT sector, we retained our underweight but, within this, made a number of switches to our holdings.

Utilities

Utilities is our second-largest relative overweight position within the portfolio, and over the course of the review period, we continued to find compelling investment opportunities within the space, particularly among U.S.-based companies. For example, we recently initiated a position in�Edison International, the�predominantly transmission and distribution (T&D)-focused utility company, which is based in California. The stock appears undervalued by the market and has an attractive dividend yield. We are of the view that the thesis could improve over time if potential legislation to reduce wildfire risk is passed, as there is a meaningful amount of future capital deployment for grid modernization and wildfire hardening.

Real Estate

In the second quarter of 2019, we closed the portfolio's underweight to real estate, moving to a broadly neutral stance. Continuing this trend, we further raised the portfolio's exposure to this sector over the third quarter of this year as a result of what we believe are evolving opportunities in the space. For example, we built a position in real estate company Prologis, which is a major owner of industrial real estate and operates primarily in Southern California, Chicago, New Jersey, and New York. This blue chip company is compounding earnings and has an excellent balance sheet and a world-class management team. Over the next several years, we believe that rental revenue growth should exceed expectations as supply chains receive an increasing share of corporate budgets.

Health Care

Having reduced the portfolio's exposure to health care last quarter (largely due to concerns around the managed care space), in this most recent quarter we further cut the extent of our positions and are now modestly underweight. This was primarily the result of exiting our holding in Merck. We have concerns over revenue concentration at this large health care company, given the focus on one specific product and limited pipeline opportunities. This is likely to constrain valuation and makes the company more vulnerable to competition.

Consumer Staples

We made the decision to sell out of Philip Morris, the multinational cigarette and tobacco manufacturing company, which sells products in over 180 countries. In our view, the company faces headwinds as it becomes increasingly difficult to offset the decline in volume growth with pricing. As a result of this sale, the portfolio moved further underweight the consumer staples sector.

IT

The portfolio is underweight the IT sector, and over the course of the review period, our overall weighting remained broadly unchanged. However, within the sector, we made a number of switches as new opportunities emerged and relative valuations shifted. For example, we initiated a position in TE Connectivity, funding this in part by reducing the size of our position in Microsoft.

  • TE Connectivity designs and manufactures connectivity and sensor products for a variety of industries. The stock has been out of favor on cyclical concerns, but connector sales are expected to grow, and the company is likely to be able to increase market share in the automotive sensor segment.
  • Microsoft: We reduced our holding in the world's dominant software provider, primarily due to the valuation beginning to look full. In addition, the company's sizable and secularly challenged Windows client operating systems business likely precludes sustainably faster growth, carries risk, and constrains the multiples the stock merits.

Industrials and Business Services

Within the industrials and business services sector, we made a new addition to the portfolio over the quarter in the form of United Parcel Services (UPS). We purchased shares in this parcel delivery service company as we believe that UPS is making the required changes to address the unprofitability in business-to-consumer (B2C) volumes. In our view, this should arrest the domestic margin decline and provide a free call option on improvement.� We funded this purchase in part through eliminating the portfolio's holding in Verizon Communications (classified within the communication services sector), the largest U.S. wireless operator. In our view, the business has now limited midterm fundamental upside and low free cash flow growth, and there is significant potential for increased competition in the wireless space.

Sectors

Total
Sectors
11
Largest Sector Financials 23.88% Was (30-Nov-2019) 24.32%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: MSCI World Index

Top Contributor^

Financials
Net Contribution 0.45%
Sector
0.03%
Selection 0.42%

Top Detractor^

Utilities
Net Contribution -0.35%
Sector
-0.38%
Selection
0.03%

^Relative

Quarterly Data as of 31-Dec-2019

Largest Overweight

Financials
By8.19%
Fund 23.88%
Indicative Benchmark 15.70%

Largest Underweight

Information Technology
By-6.32%
Fund 11.06%
Indicative Benchmark 17.38%

Monthly Data as of 31-Dec-2019

31-Dec-2019 - Sebastien Mallet, Portfolio Manager,
Our largest relative overweight positions continue to be the financials and utilities sectors while our key underweights are IT, consumer discretionary, communication services, and consumer staples. Within the communications services sector, we invested in a large U.S. wireless operator. The stock has low market expectations and an attractive valuation relative to the market. While recent quarterly results have been mixed, the company offers a solid dividend yield. We funded this purchase through the elimination of a U.S.-based public utility holding company whose dividend is less attractive on a relative basis.

Regions

Total
Regions
4
Largest Region North America 60.82% Was (30-Nov-2019) 60.40%
Other View complete Region Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: MSCI World Index

Top Contributor^

Developed Europe
Net Contribution 0.79%
Region
-0.00%
Selection 0.79%

Top Detractor^

United States
Net Contribution -0.89%
Region
-0.04%
Selection
-0.85%

^Relative

Quarterly Data as of 31-Dec-2019

Largest Overweight

Pacific Ex Japan
By2.93%
Fund 6.89%
Indicative Benchmark 3.96%

Largest Underweight

North America
By-5.66%
Fund 60.82%
Indicative Benchmark 66.49%

Monthly Data as of 31-Dec-2019

Countries

Total
Countries
21
Largest Country United States 55.82% Was (30-Nov-2019) 56.05%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2019

Indicative Benchmark: MSCI World Index

Largest Overweight

China
By3.82%
Fund 3.84%
Indicative Benchmark 0.02%

Largest Underweight

United States
By-7.29%
Fund 55.82%
Indicative Benchmark 63.11%

Monthly Data as of 31-Dec-2019

Team (As of 06-Jan-2020)

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%
N/A

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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