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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

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T. Rowe Price

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SICAV

US Blue Chip Equity Fund

Seeking superior returns from high quality US companies.

ISIN LU0133088293 WKN 767360

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

21.73%
$1.2b

1YR Return
(View Total Returns)

Manager Tenure

46.50%
6yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.70
7.53%

Inception Date 04-May-2015

Performance figures calculated in USD

30-Apr-2021 - Larry J. Puglia, Portfolio Manager,
Looking ahead, we are monitoring several key factors: (1) the strength and pace of the reopening stage of the economy, as well as developments that could potentially stall progress; (2) the magnitude of U.S. corporate tax measures being introduced as a result of the proposed infrastructure bill; and (3) the future earnings landscape with potentially tough year-over-year comparisons following significant pent-up consumer and corporate spending that is likely to be unleashed as economic and health conditions improve.
Larry J. Puglia, CFA, CPA
Larry J. Puglia, CFA, CPA, Lead Portfolio Manager

Larry J. Puglia is a portfolio manager in the U.S. Equity Division. Larry has been managing the US Large-Cap Core Growth Equity Strategy since 1993 and has had lead responsibility for all institutional accounts and other investment products within the strategy since 1997. He also is president of the Investment Advisory Committee of the US Large-Cap Core Growth Equity Strategy. Larry is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Looking ahead, there are several key factors that we are monitoring closely: (1) the strength and pace of the reopening stage of the economy, as well as factors that could potentially stall progress; (2) the magnitude of corporate tax measures being introduced as a result of the proposed infrastructure bill; and (3) the future earnings landscape with potentially tough year-over-year comparisons following significant pent-up consumer spending and corporate capital expenditure that is likely to be unleashed as economic and health conditions improve. Unprecedented levels of stimulus and momentum behind vaccine distribution have fueled this upward market movement, and, in our view, conditions would appear to be supportive of further economic growth in the near term as the recovery continues.

In terms of relative performance, a market environment that benefits stocks with the most exposure to accelerating economic growth can present near-term challenges for the secular growers that we favor. However, as long as the high-quality companies we invest in can execute their long-term strategies and grow their cash flows rapidly, we remain confident in their potential to compound in value over a full economic cycle.

Amid uncertainty, asset returns are likely to remain uneven across many industries and companies, creating the potential to add value with our strategic investing approach but requiring careful analysis to identify opportunities and manage risk. With this in mind, we will continue to emphasize high-quality growth companies that we believe can continue to generate durable earnings and free cash flow growth in most economic and regulatory environments. As always, we maintain a disciplined adherence to our rigorous investment process, which is rooted in bottom-up, fundamental research.

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 large and medium sized “blue chip” companies in the United States.

Investment Approach

  • Identify high-quality companies with leading market positions in fertile growth fields. Integrate fundamental research — emphasize sustainable growth, not momentum growth.
  • Focus on high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments.
  • Avoid overpaying for growth, while broadly diversifying portfolios, to manage portfolio risk.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

Portfolio Construction

  • Typically 100-140 stock portfolio
  • Active position sizes typically range +/- 3.00% relative to S&P 500 Index
  • Sector weights vary from 0.5X to 2.0X for primary sectors relative to S&P 500 Index

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 46.50% 21.73% 22.93% 18.47%
Indicative Benchmark % 45.25% 18.00% 16.73% 13.63%
Excess Return % 1.25% 3.73% 6.20% 4.84%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

Data as of 30-Apr-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 55.56% 20.54% 20.88% 17.13%
Indicative Benchmark % 55.56% 16.12% 15.61% 12.84%
Excess Return % 0.00% 4.42% 5.27% 4.29%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

Data as of 31-Mar-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 12-May-2021 Quarter to DateData as of 12-May-2021 Year to DateData as of 12-May-2021 1 MonthData as of 30-Apr-2021 3 MonthsData as of 30-Apr-2021
Fund % -6.16% 1.77% 2.57% 8.45% 9.61%
Indicative Benchmark % -2.79% 2.37% 8.57% 5.31% 12.86%
Excess Return % -3.37% -0.60% -6.00% 3.14% -3.25%

Inception Date 04-May-2015

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

Indicative Benchmark: S&P 500 Net 30% Withholding Tax

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.

Index returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 June 2019, 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-Apr-2021 - Larry J. Puglia, Portfolio Manager,
U.S. equities advanced in April, as most major benchmarks rose steadily to record highs. Within the portfolio, stock selection and an overweight position in the communication services sector added the most to relative returns. For example, shares of Alphabet jumped higher after the company announced positive quarterly results that showed a surge in revenue within its digital advertising and cloud segments. Alphabet also announced a substantial repurchase of its stock. Over the long term, we remain very constructive around the acceleration of digital advertising growth on the heels of outsized e-commerce penetration during the pandemic. Stock choices in health care also boosted relative performance. Within the sector, shares of robotic-assisted surgery pioneer Intuitive Surgical benefitted from deferred procedure volumes, which bounced back faster than expected. We think Intuitive still has a long runway for geographic expansion and penetration of targeted procedures, and the rollout of new robot generations should unlock considerably larger procedure total addressable markets over time, particularly in single-incision surgery directives. Conversely, our underweight positions in financials and real estate crimped relative results. We have minimal exposure to stocks in either sector as they generally lack compelling growth opportunities that meet our investment criteria.

Holdings

Total
Holdings
128
Largest Holding Amazon.com 9.59% Was (31-Dec-2020) 9.61%
Other View Full Holdings Quarterly data as of  31-Mar-2021
Top 10 Holdings 51.34% View Top 10 Holdings Monthly data as of  30-Apr-2021

Largest Top Contributor^

Alphabet
By 1.75%
% of fund 8.67%

Largest Top Detractor^

Amazon.com
By -5.04%
% of fund 9.62%

^Absolute

Quarterly Data as of 31-Mar-2021

Top Purchase

Microsoft
6.77%
Was (31-Dec-2020) 5.26%

Top Sale

Amazon.com
9.54%
Was (31-Dec-2020) 9.61%

Quarterly Data as of 31-Mar-2021

31-Mar-2021 - Larry J. Puglia, Portfolio Manager,

The digitalization of a wide range of industries and markets has accelerated during the pandemic. As individuals around the globe work, shop, and consume entertainment at home, companies that provide the infrastructure for the online economy have seen demand for their services boom, allowing them to extend their dominance. In this environment, the companies that we are looking to invest in have various, consistent qualities that single them out as potentially advantaged long-term businesses. Such attributes include high barriers to entry, low availability of substitute products, industry leadership, and pricing power with both suppliers and customers. Also essential is capable management that can allocate capital effectively and efficiently.

Information Technology

Within the information technology sector, we focus on innovative business models that can take advantage of transformational change. We favor companies with durable businesses that address large and growing markets, including electronic payment processing and public cloud computing services.

  • We added shares of Zoom Video Communications at what we feel are compelling valuations as the stock traded lower during the period, despite management reporting triple-digit growth in year-over-year earnings, a number that has accelerated since last year. The earnings report also showed accelerating revenue growth within organizations with over 10 employees, a potentially important segment for sustained performance once the pandemic has subsided. Overall, we like Zoom for its distribution strength as it has distanced itself from competitors and reached a mass-market scale. Its strategy of under-monetizing its meetings and cloud phone solutions in order to gain near-term market share provides it with additional revenue potential and gives us incremental confidence in its ability to sustain its growth over the long term.
  • We moderated the portfolio's position in Fidelity National Information Services after management reported decelerating payment activity due in part to ongoing social distancing measures. We continue to like the company over the longer term, however, as we believe Fidelity National Information Services could drive durable earnings growth by executing deal-related synergies and deleveraging its balance sheet.

Consumer Discretionary

We remain optimistic about stock-specific opportunities within the consumer discretionary sector. We favor businesses benefiting from the secular shift of consumer spending to online products and services. We believe industries such as physical retail and traditional media are secularly challenged; therefore, we plan to continue emphasizing companies within the sector that we think are on the right side of change and disruption.

  • We bought shares of Coupang, a leading South Korean e-commerce firm, as we feel the company can leverage its wide moat in logistics technology to offer consumers better merchandise selection, faster delivery, and lower prices than many of its competitors and, in doing so, continue to grow its market share. We also value Coupang's differentiated business strategy that enables it to manage its operating costs better than its competitors.
  • Although we expect Alibaba Group Holding to continue to be a solid growth company, the stock's performance has struggled in recent months and there are a number of near-term risks that could dampen returns. As a result, we modestly pared the portfolio's position to mitigate the short-term risk of increased regulatory scrutiny.

Communication Services

Within the communication services sector, we continue to seek attractive opportunities in companies with innovative business models that can take advantage of transformational change. We favor companies with durable business models that address large and growing markets, including internet search and advertising and social connectivity.

  • Pinterest operates a consumer application used for visual inspiration and product discovery. Heavy uses include fashion, home decor, and beauty trends and ideas. We bought shares during the quarter because we think Pinterest is vastly under-monetized relative to its peers. Its platform is entirely composed of user-generated content and therefore carries no cost for the company, which could enable significant margin potential.
  • We reduced the portfolio's holdings in online dating platform provider Match on strength after management reported quarterly revenues that were higher than anticipated. Notably, Match's non-Tinder apps continued to grow,�particularly Hinge, where full-year revenue was up threefold and global downloads were up 63% compared with 2019. While we sold shares, we continue to have a positive view of the company as we believe Match is a durable growth winner in its industry and is poised to benefit the most from network effects, an important determinant for success.

Health Care

Our allocation to the health care sector is composed of select therapeutics and medical device companies that we believe have limited exposure to potential regulatory pressures. We are also emphasizing managed care companies positioned to benefit from industry consolidation as well as the increasing focus on providing cost-effective solutions.

  • We added shares of pharmaceutical company Eli Lilly. We believe the company has several late-stage assets with high probabilities of success that will benefit its visibility and revenue over the next 12 to 18 months. We also expect Eli Lilly's base business will remain stable against competition and drug pricing pressures, and we are encouraged by management's goal of increasing the company's operating margin percentage over the next five years.
  • We scaled back the portfolio's position in Vertex Pharmaceuticals after management released revenue guidance that indicated slower-than-forecast growth. The revised guidance was attributed in part to a gradual ramp up of its leading drug Kaftrio in Europe as the company has to secure reimbursement deals and then work with individual countries. Despite the recent weakness, we continue to like the biotech firm over the longer term due to its clinical and pre-clinical programs, such as VX-814, a drug to treat the rare genetic disease alpha-1 antitrypsin deficiency, as well as early programs around kidney disease and pain that appear promising.

Sectors

Total
Sectors
8
Largest Sector Information Technology 37.77% Was (31-Mar-2021) 37.26%
Other View complete Sector Diversification

Monthly Data as of 30-Apr-2021

Indicative Benchmark: S&P 500 Index

Top Contributor^

Consumer Staples
Net Contribution 0.29%
Sector
0.31%
Selection -0.01%

Top Detractor^

Information Technology
Net Contribution -1.98%
Sector
-0.42%
Selection
-1.56%

^Relative

Quarterly Data as of 31-Mar-2021

Largest Overweight

Communication Services
By16.28%
Fund 27.45%
Indicative Benchmark 11.18%

Largest Underweight

Financials
By-8.48%
Fund 2.98%
Indicative Benchmark 11.45%

Monthly Data as of 30-Apr-2021

30-Apr-2021 - Larry J. Puglia, Portfolio Manager,
Given the uncertain backdrop, asset returns are likely to remain uneven across many industries and companies. However, we believe our strategic investing approach, which involves careful analysis to identify opportunities and manage risk is creating the potential to add value. With this in mind, we will continue to emphasise high-quality growth companies that we believe can continue to generate durable earnings and free cash flow growth in most economic and regulatory environments. As always, we maintain a disciplined adherence to our rigorous investment process, which is rooted in bottom-up, fundamental research.

Team (As of 12-May-2021)

Larry J. Puglia, CFA, CPA

Larry J. Puglia is a portfolio manager in the U.S. Equity Division. Larry has been managing the US Large-Cap Core Growth Equity Strategy since 1993 and has had lead responsibility for all institutional accounts and other investment products within the strategy since 1997. He also is president of the Investment Advisory Committee of the US Large-Cap Core Growth Equity Strategy. Larry is a vice president of T. Rowe Price Group, Inc.

Larry’s investment experience began in 1989, and he has been with T. Rowe Price since 1990, beginning as an investment analyst, specializing in financial services stocks, in the U.S. Equity Division. His coverage included banking, consumer finance, brokerage, investment management, and diversified financial companies. Prior to T. Rowe Price, Larry was employed by Peat Marwick Main & Co. as a senior manager.

Larry earned a B.B.A., summa cum laude, in accounting from the University of Notre Dame and an M.B.A. in finance from the University of Virginia, Darden School of Business, where he was a Shermet Scholar. He also has earned the Chartered Financial Analyst® designation and is a certified public accountant.

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

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    30
  • Years investment
    experience
    31
Craig Watson, CPA

Craig Watson is a portfolio specialist in the U.S. Equity Division. He is a member of the U.S. Large-Cap Growth team, working closely with institutional clients, consultants, and prospects. Craig also is a vice president of T. Rowe Price Group, Inc., and a trustee on the T. Rowe Price Foundation, Inc.

Craig’s investment experience began in 1995, and he has been with T. Rowe Price since 2007, beginning in the U.S. Equity Division. Prior to this, Craig was employed by HSBC Securities as a senior vice president of global equity sales and by UBS as the director of institutional equity sales.

Craig earned a B.S., magna cum laude, in accounting from Hampton University and an M.B.A. from the University of Pennsylvania, The Wharton School. He is a certified public accountant.

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

  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    13

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 150 basis points 1.59%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.69%
Class J $10,000,000 $0 $0 0.00% 0 basis points 0.03%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.75%

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