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SICAV

US Large Cap Growth Equity Fund

Seeking to identify investments with the potential to deliver double-digit earnings growth.

ISIN LU0174119775 WKN A0BMAA

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

20.20%
$2.3b

1YR Return
(View Total Returns)

Manager Tenure

12.81%
2yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.22
6.29%

Inception Date 31-Jul-2003

Performance figures calculated in USD

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31-Oct-2019 - Taymour Tamaddon, Portfolio Manager,
We are cautiously optimistic. In our view, there are still sufficient market drivers in place to support the asset class while more volatile market conditions could produce potentially attractive buying opportunities for long-term investors. In this environment, we continue to focus on investing in high-quality companies. Using the rigorous research and unique insights from our experienced analyst platform gives us an important edge as we sift through the market noise and identify companies with attractive growth prospects.
Taymour Tamaddon
Taymour Tamaddon, Lead Portfolio Manager

Taymour Tamaddon is the portfolio manager of the US Large-Cap Growth Equity Strategy in the U.S. Equity Division of T. Rowe Price. Mr. Tamaddon also is a vice president and a member of the Investment Advisory Committees for the Health Sciences, New America Growth, Growth Stock, Blue Chip Growth, and Capital Appreciation Strategies. He is a vice president of the T. Rowe Price Institutional International Funds, Inc., and the T. Rowe Price International Funds, Inc. Mr. Tamaddon also is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

We believe near-term market performance will largely depend on a resolution of the U.S.-China trade dispute, which is weighing on sentiment and corroding business confidence and capital spending. With all the fits and starts, trade and interest rates remain the two key market factors to watch.

Overall, we are cautious but optimistic that there are still sufficient market drivers in place and think more volatile market conditions could produce potentially attractive buying opportunities for long-term investors. We will continue to rely on our expertise to navigate the market, focusing on investing in high-quality companies. Leveraging the rigorous research and unique insights from our talented analyst platform gives us an important edge as we sift through the noise and identify companies with attractive growth prospects.

As always, we maintain a disciplined adherence to our rigorous process, which is rooted in bottom-up, fundamental research. In addition to uncovering underappreciated idiosyncratic stories, this approach also helps prepare us to take advantage of the market's tendency to overshoot on both the downside and the upside. Potential market overreactions often provide opportunities to trim positions into strength and add to our highest-conviction ideas on weakness.

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 from large capitalization companies in the United States that have the potential for above-average and sustainable rates of earnings growth.

Investment Approach

  • Scrutinize both company and industry- level fundamentals to identify companies with characteristics that support sustainable double-digit earnings growth.
  • Focus on high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments.
  • Exploit differences between secular and cyclical trends.
  • Limit portfolio holdings to the most attractive growth opportunities across industries.

Portfolio Construction

  • Typically 60-75 stock portfolio
  • Individual position sizes typically range +/- 1.00% to 4.00% relative to Russell 1000 Growth Index
  • Sector weights will vary from 0.5X to 3.0X for primary sectors relative to Russell 1000 Growth Index

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 12.81% 20.20% 14.32% 15.72% 20.32%
Indicative Benchmark % 16.65% 18.44% 12.95% 14.89% 18.25%
Excess Return % -3.84% 1.76% 1.37% 0.83% 2.07%

Inception Date 31-Jul-2003

Manager Inception Date 31-Dec-2016

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Data as of  31-Oct-2019

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 1.41% 19.00% 14.48% 15.57%
Indicative Benchmark % 3.31% 16.42% 12.91% 14.42%
Excess Return % -1.90% 2.58% 1.57% 1.15%

Inception Date 31-Jul-2003

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 19-Nov-2019 Quarter to DateData as of 19-Nov-2019 Year to DateData as of 19-Nov-2019 1 MonthData as of 31-Oct-2019 3 MonthsData as of 31-Oct-2019
Fund % 3.18% 6.19% 23.79% 2.91% -1.40%
Indicative Benchmark % 3.44% 6.34% 30.73% 2.80% 1.95%
Excess Return % -0.26% -0.15% -6.94% 0.11% -3.35%

Inception Date 31-Jul-2003

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Indicative Benchmark: Russell 1000 Growth Net 30% Index

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 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.

31-Oct-2019 - Taymour Tamaddon, Portfolio Manager,
Major U.S. stock indices recorded solid gains in October, with some reaching new all-time highs in the final days of the month. Within the portfolio, the communication services sector contributed to relative performance due to effective stock selection, particularly within the entertainment industry. Favourable stock selection in the health care sector added further. Shares of health services company Cigna rose due to strong quarterly results that beat revenue and earnings expectations. Revenue growth was driven by a rise in its medical and pharmacy businesses, which was helped by the acquisition of pharmacy benefits manager Express Scripts at the end of 2018. The growth was also fuelled by higher commercial sales and premium increases in the company’s integrated medical segment. We believe there is potential for earnings growth based on Cigna’s attractive business model, high barriers to entry, and limited substitutes. Conversely, stock selection within industrials and business services, particularly within the aerospace and defense industry, held back relative results, as did adverse stock selection in the information technology (IT) sector.

Holdings

Total
Holdings
65
Largest Holding Amazon.com 7.89% Was (30-Jun-2019) 8.62%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 50.44% View Top 10 Holdings Monthly data as of 31-Oct-2019

Largest Top Contributor^

Alphabet
By 0.84%
% of fund 8.21%

Largest Top Detractor^

Amazon.com
By -2.07%
% of fund 7.93%

^Absolute

Quarterly Data as of 30-Sep-2019

Top Purchase

NextEra Energy (N)
1.37%
Was (30-Jun-2019) 0.00%

Top Sale

Northrop Grumman (E)
0.00%
Was (30-Jun-2019) 1.04%

Quarterly Data as of 30-Sep-2019

30-Sep-2019 - Taymour Tamaddon, Portfolio Manager,

Overall, we remain constructive on the U.S. economy and think company fundamentals look relatively healthy. However, the choppy market environment may continue due to several factors, including slowing earnings growth and uncertainty surrounding U.S.-China trade policy. More volatile market conditions could produce potentially attractive buying opportunities for long-term investors.

Information Technology

Disruptive business models and technologies within the sector continue to present compelling investment opportunities. Secular demand for public cloud computing services continues to be a growth driver in the segment. We also continue to favor companies driven by the convergence of communications and computing, including internet software companies, and those that will benefit from broad global tailwinds in digital payments.

  • We added shares of ASML Holding, a semiconductor capital equipment company that specializes in lithography tools; technologies that enable manufacturers to improve memory and logic chip performance by including more transistors on a silicon wafer. We like ASML Holding's monopoly position in next-generation lithography equipment, tools that we believe will be essential to producing the leading-edge chips needed to power artificial intelligence and other intensive processes. In our view, the market underestimates the potential for this technology to drive revenue growth and improve profitability.
  • Shares of Maxim Integrated Products faced headwinds from soft demand in its industrial segment, including in China, and slower auto sales. We sold shares during the period to pursue other investment opportunities that we feel offer greater upside potential.

Consumer Discretionary

We have a sizable position in the consumer discretionary sector and are constructive on stock-specific opportunities within the sector. We are focused on businesses benefiting from the secular shift of consumer spending to online retail, as well as companies positioned to take advantage of the long-term growth in online travel services.

  • We added shares of Alibaba Group Holding during the quarter. While trade tensions are a near-term overhang on the stock, we remain constructive on the long-term fundamentals and expect the Chinese internet giant's investments in its cloud business and offline retail to pay off by expanding the company's total addressable market. Moreover, the company's rich data on user behavior across its different services also create ample opportunity for monetization, while its leadership in online retail offers exposure to rising household incomes in China and other emerging markets.
  • Shares of fast food giant McDonald's generated strong returns in 2019 due to successful sales and digital initiatives as well as positive comparable sales. After the runup in stock price, we sold shares and redeployed the proceeds to fund more compelling opportunities.

Health Care

We remain focused on finding opportunities in the health care sector that can take advantage of lasting trends such as managed care industry consolidation, innovations in medical equipment, and robotic technology. In therapeutics, our emphasis is on select companies that have strong fundamentals and the potential to bring additional new drugs to market in areas with large, unmet clinical needs.

  • HCA Healthcare is the largest private hospital owner and operator in the United States. We bought shares during the quarter as we think HCA is uniquely positioned as an industry consolidator and should continue to benefit from both its industry-leading position and aging demographics.

Sectors

Total
Sectors
9
Largest Sector Information Technology 31.88% Was (30-Sep-2019) 30.50%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: Russell 1000 Growth Index

Top Contributor^

Utilities
Net Contribution 0.11%
Sector
0.11%
Selection 0.00%

Top Detractor^

Information Technology
Net Contribution -0.88%
Sector
-0.09%
Selection
-0.79%

^Relative

Quarterly Data as of 30-Sep-2019

Largest Overweight

Communication Services
By8.78%
Fund 20.43%
Indicative Benchmark 11.66%

Largest Underweight

Information Technology
By-6.03%
Fund 31.88%
Indicative Benchmark 37.92%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - Taymour Tamaddon, Portfolio Manager,
Disruptive business models and technologies within the IT sector continue to present compelling investment opportunities, in our view. Secular demand for public cloud computing services continues to be a growth driver in the segment. We also continue to favour companies driven by the convergence of communications and computing, including internet software companies, and those that will benefit from broad global tailwinds in digital payments.

Team (As of 31-Aug-2019)

Taymour Tamaddon

Taymour Tamaddon is the portfolio manager of the US Large-Cap Growth Equity Strategy in the U.S. Equity Division of T. Rowe Price. Mr. Tamaddon also is a vice president and a member of the Investment Advisory Committees for the Health Sciences, New America Growth, Growth Stock, Blue Chip Growth, and Capital Appreciation Strategies. He is a vice president of the T. Rowe Price Institutional International Funds, Inc., and the T. Rowe Price International Funds, Inc. Mr. Tamaddon also is a vice president of T. Rowe Price Group, Inc.

Mr. Tamaddon has 16 years of investment experience, 15 of which have been with T. Rowe Price. He joined the firm in 2004 after serving as a summer intern with T. Rowe Price in 2003, covering the eye care industry. Prior to this, Mr. Tamaddon was employed by Amazon.com in the areas of finance and merchandising. He also was a consultant with Booz Allen Hamilton, specializing in the energy industry.

Mr. Tamaddon earned a B.S., cum laude, in applied physics from Cornell University. He also earned an M.B.A., with high distinction, from the Tuck School of Business at Dartmouth, where he was an Edward Tuck Scholar. Mr. Tamaddon also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2017
  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    16
Larry Puglia

Larry J. Puglia is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is president of the Investment Advisory Committee of the US Large-Cap Core Growth Equity Strategy. He 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. Mr. Puglia is a vice president of T. Rowe Price Group, Inc.

Mr. Puglia has 30 years of investment experience, 29 of which have been with T. Rowe Price. He joined the firm in 1990 as an investment analyst specializing in financial services stocks. His coverage included banking, consumer finance, brokerage, investment management, and diversified financial companies. Mr. Puglia also served as an investment analyst covering the pharmaceutical industry. He began his career at Peat Marwick Main & Co. in 1982, ultimately serving as a senior manager.

Mr. Puglia 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 named a Shermet Scholar. He has earned the Chartered Financial Analyst designation and is a certified public accountant.

  • Years at
    T. Rowe Price
    29
  • Years investment
    experience
    30
Joseph Fath

Joe Fath is the portfolio manager for the US Growth Stock Strategy and is a member of the portfolio management team for the US Large-Cap Growth Equity Strategy in the U.S. Equity Division. He is a member of the U.S. Equity Steering Committee. Mr. Fath is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Fath has 19 years of investment experience, 17 of which have been with T. Rowe Price. He joined the firm in 2002 as an analyst covering gaming, lodging, cruise lines, airlines, and air freight and logistics companies after serving as a summer intern for the firm in 2001. Mr. Fath was also the chief financial officer and cofounder of Broadform, Inc., a start-up educational/software company. In addition, he worked as director of operations analysis for Players International, a multi-jurisdictional gaming operator in the United States. Mr. Fath was also employed by Coopers & Lybrand as a senior associate in the Business Assurance and Financial Advisory Services Group.

Mr. Fath earned a B.S., with honors, in accounting from the University of Illinois at Urbana-Champaign. He also earned an M.B.A., with honors, in finance and entrepreneurial management from The Wharton School, University of Pennsylvania. Mr. Fath is also a certified public accountant.

  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    19
David L. Rowlett, CFA

David Rowlett is an associate portfolio manager for the US Large-Cap Growth Equity Strategy in the U.S. Equity Division of T. Rowe Price. He is a vice president and member of the Investment Advisory Committees of the New America Growth, Blue Chip Growth, Growth Stock, and Institutional Large-Cap Core Growth Strategies. Mr. Rowlett is a vice president of T. Rowe Price Group, Inc.

Mr. Rowlett has 16 years of investment experience, 11 of which have been with T. Rowe Price. Prior to joining the firm in 2008, he was an analyst and portfolio manager for Neuberger Berman in New York.

Mr. Rowlett earned a B.B.A., cum laude, in finance from the University of Georgia and an M.B.A. from the University of North Carolina at Chapel Hill. He also has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    16
Ronald Taylor

Ron Taylor is a portfolio specialist in the Equity Division of T. Rowe Price. He is a member of the US Large-Cap Growth Equity Strategy team working closely with institutional clients, consultants, and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc.

Mr. Taylor has 31 years of investment experience, 16 of which have been at T. Rowe Price. Prior to joining the firm in 2003, he was employed by Zurich Scudder Investments as an equity product specialist and later as the director of Institutional Client Service. Mr. Taylor also previously worked for Chancellor Capital Management as an equity product specialist and at Putnam Investments as an equity analyst and later in new business development and client service. He began his career as a high yield bond analyst at Columbia Savings & Loan.

Mr. Taylor earned a B.A. in economics from the University of California at Los Angeles and an M.B.A. from Harvard Business School.

  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    31

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% 150 basis points 1.60%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.71%
Class J $10,000,000 $0 $0 0.00% 0 basis points 0.03%
Class Q $15,000 $100 $100 0.00% 65 basis points 0.76%

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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