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)

18.95%
$2.7b

1YR Return
(View Total Returns)

Manager Tenure

20.09%
3yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.16
6.64%

Inception Date 31-Jul-2003

Performance figures calculated in USD

Other Literature

30-Jun-2020 - Taymour Tamaddon, Portfolio Manager,
We do not pretend to know how long the current crisis will persist or how deep the economic fallout will be. But we will remain opportunistic and firmly focused on the ideas that we believe have the potential to create the most value when we emerge on the other side of this crisis. As always, we are keeping our pencils sharp and will look to add to our highest-conviction ideas.
Taymour Tamaddon, CFA
Taymour Tamaddon, CFA, Lead Portfolio Manager

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

Click for Manager Outlook
 

Strategy

Manager's Outlook

As economies gradually reopen, we believe a sustained recovery will largely depend on controlling the spread of the coronavirus. The key question for markets may now be how long it will take for companies to regain enough earnings power to justify current valuation levels while compensating investors for the risk that an economic recovery might not progress as rapidly or as evenly as expected. We are also mindful that the rally in risk assets has been driven by massive doses of fiscal and monetary stimulus. Amid uncertainty, asset returns are likely to remain uneven across sectors, industries, and companies, creating the potential to add value with a strategic investing approach but requiring careful analysis to identify opportunities and manage risk.

Since we expect volatility to continue in this uncertain environment, we intend to opportunistically add to high-conviction names. As always, our focus is on owning high-quality growth companies with a competitive advantage in their respective markets, especially companies that generate strong free cash flow and have seasoned management teams. We search for companies that have the potential to generate double-digit earnings growth over time by participating in expanding markets, taking market share, or improving profitability faster than sales. We believe these companies are best equipped to navigate and thrive in the current unsettled environment.

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 % 20.09% 18.95% 16.50% 17.75% 21.74%
Indicative Benchmark % 22.85% 18.55% 15.41% 16.71% 20.07%
Excess Return % -2.76% 0.40% 1.09% 1.04% 1.67%

Inception Date 31-Jul-2003

Manager Inception Date 31-Dec-2016

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Data as of  30-Jun-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 20.09% 18.95% 16.50% 17.75%
Indicative Benchmark % 22.85% 18.55% 15.41% 16.71%
Excess Return % -2.76% 0.40% 1.09% 1.04%

Inception Date 31-Jul-2003

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Data as of  30-Jun-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 07-Aug-2020 Quarter to DateData as of 07-Aug-2020 Year to DateData as of 07-Aug-2020 1 MonthData as of 30-Jun-2020 3 MonthsData as of 30-Jun-2020
Fund % 3.20% 11.80% 22.90% 3.46% 27.19%
Indicative Benchmark % 2.13% 9.97% 20.56% 4.33% 27.73%
Excess Return % 1.07% 1.83% 2.34% -0.87% -0.54%

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.

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-Jun-2020 - Taymour Tamaddon, Portfolio Manager,
U.S. equities produced positive returns in June, capping a robust but volatile second quarter. Within the portfolio, stock selection in the information technology sector had the most negative impact on relative results. For example, shares of Global Payments fell over the month due mainly to uncertainties resulting from the coronavirus pandemic. Despite the recent weakness, we see potential for intermediate-term earnings growth, driven by stronger revenues from technology products and synergies from recent acquisitions. On the positive side, stock selection in the communication services boosted relative returns. Within the sector, shares of streaming-audio leader Spotify spiked higher as growth in both premium and advertising-supported subscriptions accelerated, driven by the company’s freemium model that boasts high conversion rates. It also has the unique advantage of being able to retain listeners and reduce churn rates during times of economic stress. Spotify also received a boost from its concerted effort to assert its leadership in the podcast space as it recently made a splash with several exclusive licensing deals that are expected to grow listenership and support advertising growth.

Holdings

Total
Holdings
65
Largest Holding Amazon.com 9.55% Was (31-Mar-2020) 8.89%
Other View Full Holdings Quarterly data as of 30-Jun-2020
Top 10 Holdings 48.34% View Top 10 Holdings Monthly data as of 30-Jun-2020

Largest Top Contributor^

Amazon.com
By 0.67%
% of fund 9.59%

Largest Top Detractor^

Ross Stores
By -0.81%
% of fund 1.24%

^Absolute

Quarterly Data as of 30-Jun-2020

Top Purchase

Amazon.com
9.51%
Was (31-Mar-2020) 8.89%

Top Sale

VMware (E)
0.00%
Was (31-Mar-2020) 1.15%

Quarterly Data as of 30-Jun-2020

30-Jun-2020 - Taymour Tamaddon, Portfolio Manager,

The digitization 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 new digitized world, scale is crucial. Companies with the most capital to deploy can invest in the latest technology, which in turn attracts more customers. The tech giants that have best embodied this phenomenon are the world's leading platform companies, a list that typically includes Facebook, Alphabet (Google), and Amazon.com in the U.S. and Alibaba and Tencent in China. We believe these major technology platforms not only have the ability to continue to grow earnings and cash flow in a challenging economic environment, but also have opportunities to gain market share from weaker competitors, such as bricks-and-mortar retailers.

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 Wix.com during the quarter. The company has benefited from increased user engagement as social distancing measures accelerated the need for businesses to have an online presence in order to reach consumers. With its disruptive website development technology driving share gains, innovative new tools that are ready to be monetized, and a subscription business model providing a high degree of recurring revenue, we believe Wix.com's runway for growth is underappreciated by the market.
  • We sold VMware on relative strength as shares rallied after a difficult start to the year. In addition to valuation concerns, we feel that an uncertain information technology spending environment related to the coronavirus pandemic could weigh on the company's performance in the near term. We redeployed the proceeds of the sale to fund more compelling opportunities.

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 discount retailer Ross Stores. The company started opening its stores again in mid-May, and management indicated that sales trends have been encouraging due to pent-up demand. Overall, we feel the off-price retailing segment is well positioned as a coronavirus-recovery play. We expect off-price retailers such as Ross to benefit from broader coronavirus-related supply chain disruptions that cause inventories to pile up, allowing them to source better products at lower prices.
  • We sold shares of Nike during the period given the challenges we foresee for the company over the near term due to excess inventory and wholesale challenges. While Nike remains a premier consumer company, we prefer other companies in the sector that we think have better risk/reward profiles.

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.

  • We added shares of biotechnology firm Incyte during the period. We think the company may be underappreciated by the market given the potential of its promising lymphoma treatment and improved visibility into the life-cycle extension of Jakafi, its treatment for bone marrow disorders.
  • Alexion Pharmaceuticals develops and commercializes therapies for severe and rare diseases. We sold shares on strength during the quarter as shares jumped higher in May after management released earnings results that exceeded expectations.

Sectors

Total
Sectors
8
Largest Sector Information Technology 34.71% Was (31-May-2020) 33.66%
Other View complete Sector Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark: Russell 1000 Growth Index

Top Contributor^

Communication Services
Net Contribution 1.95%
Sector
-0.17%
Selection 2.12%

Top Detractor^

Health Care
Net Contribution -0.72%
Sector
-0.08%
Selection
-0.64%

^Relative

Quarterly Data as of 30-Jun-2020

Largest Overweight

Communication Services
By10.95%
Fund 22.10%
Indicative Benchmark 11.14%

Largest Underweight

Information Technology
By-9.19%
Fund 34.71%
Indicative Benchmark 43.90%

Monthly Data as of 30-Jun-2020

30-Jun-2020 - Taymour Tamaddon, Portfolio Manager,
Periods of stress and crisis can often lead to meaningful changes. Many of the innovative technology companies that we prefer are operating in huge addressable markets but face ongoing inertia when it comes to persuading customers that pursuing new ways of doing things is worth the effort. We think that moments like the current crisis can push companies and consumers to embrace changes much faster than they would have done under normal circumstances. Broadly speaking, this should be supportive of the powerful secular trends that we tend to invest behind.

Team (As of 05-Aug-2020)

Taymour Tamaddon, CFA

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

Taymour’s investment experience began in 2003, and he has been with T. Rowe Price since 2004, beginning in the U.S. Equity Division. He also served as a summer intern with the firm in 2003. Prior to T. Rowe Price, Taymour 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.

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

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

  • Fund manager
    since
    2017
  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    17
Larry J. Puglia, CFA, CPA

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
    30
  • Years investment
    experience
    31
Joseph Fath

Joe Fath is the portfolio manager for the U.S. Growth Stock Equity Strategy, including the Growth Stock Fund, in which he is chairman of the investment advisory committee.  He is a vice president and member of the investment advisory committee of the U.S. Quantitative US, U.S. Mid-Cap Growth Equity, U.S. Communications and Technology and U.S. Large-Cap Growth Equity Strategies.   He is vice president of T. Rowe Price Group. 

Joe’s investment experience began in 2000 and he has been with T. Rowe Price since 2002, beginning in the U.S. Equity Division after serving as a summer intern in 2001.   Prior to this, Joe was the chief financial officer and co-founder of Broadform, Inc., a start-up educational software company.  In addition, he worked as director of operations and analysis for Players International, a multi-jurisdictional gaming operator in the United States.  Joe was also employed by Coopers & Lybrand as a senior associate in the Business Assurance and Financial Advisory Services Group.  

Joe 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.  He is a Certified Public Accountant.

  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    19
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 (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 1.58%
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 0.02%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.73%

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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