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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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SICAV

Global Technology Equity Fund

To provide long-term capital growth by investing mainly in technology companies, and companies enabled by technology.

ISIN LU1244139827 Bloomberg TRGBTEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

19.97%
$1.2b

1YR Return
(View Total Returns)

Manager Tenure

55.42%
1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.15
8.82%

Inception Date 15-Jun-2015

Performance figures calculated in USD

Other Literature

31-Oct-2020 - Alan Tu, Portfolio Manager ,
The performance of global technology stocks has begun to diverge as investors have received more data points on how individual companies are performing amid the pandemic. This has benefitted our portfolio and our focus on firms that are showing they are on the right side of durable changes to the global economy, particularly in the areas of e-commerce, cloud-based computing, and online collaboration.
Alan Tu, CFA
Alan Tu, CFA, Portfolio Manager

Alan Tu is the portfolio manager for the Global Technology Equity Strategy in the U.S. Equity Division. He also is chairman of its Investment Advisory Committee. Alan is a vice president and an Investment Advisory Committee member of the US Small-Cap Growth II Equity, Science & Technology Equity, US Large-Cap Core Growth Equity, Communications and Technology Equity, and US Tax-Efficient Multi-Cap Growth Equity Strategies. In addition, he is an Investment Advisory Committee member of the Global Growth Equity Strategy. Alan also is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

After rebounding in unison in late spring, the performance of global technology stocks began to diverge in the third quarter as investors received more data points on how individual companies were performing amid the pandemic. This benefited our portfolio and our focus on firms that are showing they are on the right side of durable changes to the global economy, particularly in the areas of e-commerce, cloud-based computing, and online collaboration. Indeed, we believe that the prospects for many our holdings have brightened recently; leading software-as-a-service firms have seen orders ramp up significantly, for example, even in the face of cautious business investment. Meanwhile, the semiconductor industry is being upended by an incipient China-U.S. trade war, which is creating both challenges and opportunities for investors. To be sure, tech valuations appear extended in some cases, especially in the IPO market. We are focused on avoiding pockets of frothiness in favor of stocks where higher multiples are justified based on both current fundamentals and reasonable prospects for accelerated change in the years ahead.

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 technology development or utilization companies, with a focus on leading global technology companies. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Seeks long-term growth by investing primarily in the common stocks of companies that generate the majority of revenues from the development, advancement, and use of technology.
  • Stock selection is driven by rigorous research and analysis of companies, sectors, and industry trends.
  • The portfolio invests primarily in the common stocks of technology companies or companies enabled by technology across the entire market capitalization spectrum. We seek companies which can successfully weather economic cycles and deliver sustainable growth through product development and innovation, at a reasonable valuation.
  • While our primary emphasis is on a company’s prospects for future growth, valuation can also be an important consideration, particularly when valuation reaches extreme levels.
  • The portfolio is less diversified than a non-focused fund and its substantial reward potential is coupled with significant risk. In addition, any foreign holdings could be affected by declining local currencies or adverse political or economic events.

Portfolio Construction

  • Typically 35-60 stock portfolio
  • Non-U.S. companies typically make up 25-45% of the portfolio
  • Portfolio consists of highest conviction ideas from a global perspective
  • Diversification across sectors, countries/currencies, and end markets is a risk management tool
  • Bottom-up stock picking is used to capitalize on rapid and extreme changes in technology trends

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 55.42% 19.97% 22.56% 22.33% 32.01%
Indicative Benchmark % 32.86% 19.08% 21.23% 19.85% 30.14%
Excess Return % 22.56% 0.89% 1.33% 2.48% 1.87%

Inception Date 15-Jun-2015

Manager Inception Date 28-Feb-2019

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  31-Oct-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 62.18% 23.03% 26.09% 23.09%
Indicative Benchmark % 44.79% 23.66% 24.74% 21.23%
Excess Return % 17.39% -0.63% 1.35% 1.86%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  30-Sep-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 20-Nov-2020 Quarter to DateData as of 20-Nov-2020 Year to DateData as of 20-Nov-2020 1 MonthData as of 31-Oct-2020 3 MonthsData as of 31-Oct-2020
Fund % 9.07% 7.40% 56.13% -1.53% 5.35%
Indicative Benchmark % 9.55% 4.74% 32.44% -4.39% 0.64%
Excess Return % -0.48% 2.66% 23.69% 2.86% 4.71%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Indicative Benchmark: MSCI All Country World Index Information Technology 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.

Index 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-Oct-2020 - Alan Tu, Portfolio Manager ,
Global equities lost ground in October amid surging coronavirus cases in the U.S. and Europe, lack of additional stimulus in the U.S., and uncertainty over the upcoming U.S. election. Within the portfolio, stock selection in software added most to relative performance. In particular, Five9 and Atlassian, companies well positioned to benefit from strong growth in cloud computing, aided relative performance. Both companies posted solid quarterly results to end the period. A significant overweight to internet and stock selection within semiconductors were also additive. In areas of relative underperformance, stock selection in industrials diminished returns the most. Notably, Tesla detracted from results as it faced an anxious market in the last half of the month even as it exceeded electronic vehicle delivery targets and improved its margins. Our lack of exposure to the hardware sector also detracted slightly from performance during the period.

Holdings

Total
Holdings
50
Largest Holding Alibaba Group Holding 5.78% Was (30-Jun-2020) 5.94%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 39.01% View Top 10 Holdings Monthly data as of 31-Oct-2020

Largest Top Contributor^

Alibaba Group Holding
By 0.30%
% of fund 5.84%

Largest Top Detractor^

Slack Technologies
By -1.04%
% of fund 3.34%

^Absolute

Quarterly Data as of 30-Sep-2020

Top Purchase

Slack Technologies
3.06%
Was (30-Jun-2020) 1.91%

Top Sale

Intuit (E)
0.00%
Was (30-Jun-2020) 2.15%

Quarterly Data as of 30-Sep-2020

30-Sep-2020 - Alan Tu, Portfolio Manager ,

We broadened and diversified the portfolio's holdings. Our focus remains on technology companies that we believe are durable winners in the current environment with the potential to benefit from lasting behavioral changes on the other side. We also increased the portfolio's exposure to a cyclical recovery, adding to positions in semiconductor stocks exposed to the memory complex and solidifying our positioning in names that we believe are integral to the semiconductor capital supply chain.

Software

We regard the business models and growth runways available in cloud-based enterprise software as some of the most compelling over the long term. As enterprises seek to reduce costs, improve efficiency, and engage with customers across multiple channels, high-quality providers of cloud-based software could see the uptake of their solutions accelerate. We favor names that we believe can penetrate large addressable markets and stand to benefit as the digitalization of the enterprise gathers steam. We refined our positioning in this subsector to reflect evolving risk/reward profiles.

  • We initiated a position in Square, a payment service provider focused on small merchants, at an attractive relative valuation. We are encouraged by Square's resilient small and mid-size business (SMB) base. We are also impressed with accelerating engagement with the company's Cash App service, which has been the stock's main valuation driver. Although we are mindful of the potential for Cash App fundamentals to decelerate over the coming quarters, we are more bullish on the long-term future of the business. In particular, we see the opportunity for increased synergies across Square's SMB and Cash App segments, which could drive higher returns.
  • HubSpot provides software-as-a-service (SaaS) marketing and content resource management applications to small and mid-size business customers across a range of verticals. We initiated a position, as we are encouraged by the company's robust customer growth and impressive subscription revenue momentum. In our view, HubSpot should benefit from secular tailwinds and a strong management team.
  • We added to our position in Slack Technologies as the stock sold off due to noisy quarterly earnings results. We continue to view Slack Technologies as a highly strategic asset, as the company's focus on messaging solutions and the ease with which its platform integrates services from other cloud-based software providers encourage viral adoption. This, in turn, shortens sales cycles and gives the company a top-tier margin profile. We are also drawn to the unique external network potential that Slack Technologies offers. In our view, these qualities give the company a massive addressable market that spans a wide range of industries, creating a long runway for growth.
  • Intuit is a leading provider of financial software for consumers, SMBs, and professional accountants. We eliminated our position. In a normal environment, the company should have an opportunity to drive topline growth as it transitions to a SaaS model and new features gain traction among business customers. However, we reallocated our funds into other names that we see as having greater risk/reward potential or where we have a particular information edge.
  • We eliminated our stake in Proofpoint. We still believe that Proofpoint's suite of leading email security solutions stands to benefit from strong demand growth as hackers increasingly target this vulnerability and enterprises shift their email to the cloud. We also value Proofpoint's SaaS model, growth potential in international markets, and ongoing investments to address emerging threats. However, we are wary of the possibility of coronavirus-related challenges weighing on the company's results in the back half of the year. Additionally, we are mindful of a reduced growth ceiling as the company continues to mature.

Internet

Our internet holdings focus on platform companies that we believe have significant competitive advantages and compelling long-term growth prospects. We tend to favor the large social media, online advertising, and e-commerce companies in developed and emerging markets because we think that their strong balance sheets, internal talent, superior computing infrastructure, and valuable data position them to drive future innovation. We pared our exposure to this subsector, eliminating stakes in companies where the thesis has changed and moderating the sizes of certain positions.

  • Snap operates Snapchat, a communication tool that is especially popular among users who are 13 to 24 years old. We eliminated our position due to a reduced risk/reward profile as the company fell short of its user growth projections. Additionally, longer term, we recognize that Apple's eventual rollout of its opt-in privacy feature will be a negative for app publishers like Snapchat.
  • Alphabet boasts leading positions in search, programmatic advertising, mobile, and video. We sold shares on relative strength in order to manage our position size following share price appreciation in recent periods. Although we acknowledge the risk of stepped-up regulation, we believe that Google's parent company is well placed to deliver sustainable growth as it leverages its rich trove of user data and strength in AI to improve monetization across its platforms. In our view, the company's strong balance sheet, coupled with world-class computing talent and infrastructure, give it a leg up in driving innovation internally and through private investments. Alphabet's ancillary growth opportunities that show promise include cloud services, AI-enabled hardware, and autonomous driving.

Semiconductors

We increased the portfolio's exposure to a cyclical recovery, adding to positions in semiconductor stocks exposed to the memory complex and solidifying our positioning in names that we believe are integral to the semiconductor capital supply chain. We acknowledge that coronavirus-related challenges could push out the timing of a recovery cycle in key semiconductor markets, especially those with exposure to automobiles and smartphones. However, over the long term, we believe the secular trend of increasing demand for advanced chips in data centers, AI, and automobiles and other industrial end markets remains intact.

  • Taiwan Semiconductor Manufacturing remains the leading-edge process foundry. We added to our position as share prices rose dramatically in July due to Intel's weaker-than-expected execution on leading-edge nodes, which we believe will bring more opportunities to Taiwan Semiconductor Manufacturing as the market consolidates. In our view, the supply/demand dynamics for leading-edge nodes are very favorable for Taiwan Semiconductor Manufacturing.
  • We initiated a position in MediaTek, a fabless design house that focuses on providing handset chips to emerging market handset vendors. Following a solid quarterly earnings report and raised guidance, we believe the company is well positioned for broad-based revenue growth over the near term. In our view, the company stands to benefit from increased 5G adoption and strong demand for connectivity and power management chips due to the ongoing shift toward a work-from-home environment. We also believe MediaTek could take advantage of shifting geopolitical dynamics as Huawei Technologies seeks to expand its supplier network.

Industry

Total
Industries
N/A
31-Jul-2020 - Alan Tu, Portfolio Manager ,
We increased the portfolio’s exposure to semiconductors, focusing on memory chipmakers and names with meaningful exposure to the automotive end market. Low inventories after last year’s downcycle suggest that key segments of this subsector should benefit when economic activity fully recovers. Within semiconductors, we also bought shares of companies that we believe are well-positioned to benefit from a shifting competitive landscape.

Regions

Total
Regions
4
Largest Region North America 71.41% Was (30-Sep-2020) 71.87%
Other View complete Region Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Pacific Ex Japan
By7.21%
Fund 18.69%
Indicative Benchmark 11.48%

Largest Underweight

North America
By-6.75%
Fund 71.41%
Indicative Benchmark 78.16%

Monthly Data as of 31-Oct-2020

Countries

Total
Countries
10
Largest Country United States 67.38% Was (30-Sep-2020) 67.45%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Top Contributor

N/A

Top Detractor

N/A

Largest Overweight

China
By5.12%
Fund 6.51%
Indicative Benchmark 1.39%

Largest Underweight

United States
By-9.40%
Fund 67.38%
Indicative Benchmark 76.78%

Monthly Data as of 31-Oct-2020

Team (As of 01-Oct-2020)

Alan Tu, CFA

Alan Tu is the portfolio manager for the Global Technology Equity Strategy in the U.S. Equity Division. He also is chairman of its Investment Advisory Committee. Alan is a vice president and an Investment Advisory Committee member of the US Small-Cap Growth II Equity, Science & Technology Equity, US Large-Cap Core Growth Equity, Communications and Technology Equity, and US Tax-Efficient Multi-Cap Growth Equity Strategies. In addition, he is an Investment Advisory Committee member of the Global Growth Equity Strategy. Alan also is a vice president of T. Rowe Price Group, Inc. 

Alan’s investment experience began in 2012, and he has been with T. Rowe Price since 2014, beginning in the U.S. Equity Division. After that, he was an investment analyst following software companies in the technology sector. He also served as a summer intern in 2013. Prior to T. Rowe Price, Alan was employed by Ananda Capital Management as an analyst, conducting analyses of small-cap Chinese and U.S. equities. He also was a valuation associate at Huron Consulting Group.

Alan earned a B.S., summa cum laude, in business administration from the University of California, Berkeley, and an M.B.A., with honors, from the University of Chicago, Booth School of Business. He also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2019
  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    6

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% 175 basis points 1.87%
Class I $2,500,000 $100,000 $0 0.00% 85 basis points 0.94%
Class Q $1,000 $100 $100 0.00% 85 basis points 0.97%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.06%

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