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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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SICAV

Global Aggregate Bond Fund

Risk-aware investing, exploiting inefficiencies in global bond markets.

ISIN LU1438968973 Bloomberg TRPGAAE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

4.12%
$631.4m

1YR Return
(View Total Returns)

Manager Tenure

1.14%
5yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.00
1.41%

Inception Date 30-Jun-2016

Performance figures calculated in EUR

31-Jan-2020 - Arif Husain, Head of International Fixed Income,
The environment for core government bonds remains mixed. Coronavirus concerns will likely depress the wider macroeconomic environment and boost core asset prices in the short term. However, if the outbreak proves short lived, continued accommodative policies from major central banks, prior positive indicators and a release of pent-up demand could kickstart the economy later this year. We therefore continue to monitor data closely, looking for investments that can perform well in different market environments.
Arif Husain, CFA
Arif Husain, CFA, Co-Portfolio Manager

Arif Husain is the head of the International Fixed Income Division. He is a co-portfolio manager for the International Bond and Institutional International Bond Strategies and the lead portfolio manager for the Global Aggregate Bond Strategy. Arif also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Despite progress in terms of vaccination programs, reopenings, and economic recovery, the market environment remains uncertain. Financial conditions remain supportive; however, some indications point to growth already peaking, which could suggest subdued growth going forward. In addition, wider concerns over the spread of the delta variant of the coronavirus, as well as escalating geopolitical tensions, are further causes for concern. However, credit markets and emerging markets debt remain attractive despite stretched valuations, and we stand ready to add to these positions based on our fundamental research .

Elsewhere, the abrupt shift from the Fed in June has led to a revision of inflation and interest rate hike expectations, with a subsequent period of U.S. dollar strength. These factors have clear short-term implications for fixed income markets; however, we believe the longer-term picture is more nuanced. While some long-term bond markets strengthened on the Fed's move, we feel the potential emergence of structural inflation could weigh on developed market bond prices across the curve going forward. Furthermore, we anticipate the current period of U.S. dollar strength could subside if the recovery scenario continues to play out. With this in mind, we are looking for signs of clarity on points such as inflation and monetary policy, while retaining portfolio flexibility to act accordingly when necessary.

Investment Objective

To maximise the value of its shares through both growth in the value of, and income from, its investments. The fund invests mainly in a diversified portfolio of bonds of all types from issuers around the world.

Investment Approach

  • To generate a consistent performance over benchmark by exploiting inefficiencies in the full universe of the global fixed income and currency markets:~~Focus on successful alpha generation.^^~~Importance of effective risk management.^^
  • Target average tracking error: Between 150 basis points and 300 basis points per annum.
  • Alpha generation classified under three main performance activities:~~Currency Management: 35% Expected contribution to value added^^~~Country/Duration Management: 35% Expected contribution to value added ^^~~Sector Allocation/Security Selection: 30% Expected contribution to value added^^~~Sub investment Grade Allocation: 20% Expected contribution to value added^^~~Sector/Security Selection: 10% Expected contribution to value added^^
  • 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

  • Currency limit: maximum +/- 40% relative to benchmark
  • Weighted duration limit: maximum +/- 3 years relative to benchmark
  • Sub-investment grade: maximum 20%
  • Above investment grade: not restricted (includes corporates and emerging markets)
  • Portfolio holdings: between 400 and 600 issuers
  • Average credit quality: A- or better

Performance (Class A | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 1.14% 4.12% 1.28% 1.30%
Indicative Benchmark % 1.84% 4.06% 1.29% 1.25%
Excess Return % -0.70% 0.06% -0.01% 0.05%

Inception Date 30-Jun-2016

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Data as of 31-Aug-2021

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -2.85% 3.73% 1.10% 1.10%
Indicative Benchmark % -2.80% 3.69% 1.01% 1.01%
Excess Return % -0.05% 0.04% 0.09% 0.09%

Inception Date 30-Jun-2016

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Data as of 30-Jun-2021

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 24-Sep-2021 Quarter to DateData as of 24-Sep-2021 Year to DateData as of 24-Sep-2021 1 MonthData as of 31-Aug-2021 3 MonthsData as of 31-Aug-2021
Fund % -0.09% 1.14% 0.95% 0.19% 2.89%
Indicative Benchmark % -0.22% 1.16% 1.02% 0.04% 3.59%
Excess Return % 0.13% -0.02% -0.07% 0.15% -0.70%

Inception Date 30-Jun-2016

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Performance figures calculated in EUR

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.

31-Aug-2021 - Arif Husain, Head of International Fixed Income,
Core government bond yields climbed higher in August. Curves steepened on the month, supported by encouraging economic data, higher-than-expected inflation, and rising expectations of asset purchase tapering. Within the portfolio, our allocation to U.S. inflation-linked bonds, which gained ground thanks to strong data prints on the labour market and inflation fronts, supported relative returns. Our underweight position in eurozone duration added further relative value. By contrast, an option-expressed overweight position in the U.S. Treasury curve held back relative performance. From a currency perspective, an overweight in the Chilean peso detracted from relative gains. Despite a rate hike near the end of the month, the peso declined overall, as the threat of a mining strike undermined copper prices. Our off-benchmark position in the Indian rupee added to relative performance, however. Within sector allocation and security selection, our allocations to euro-denominated government-related debt, as well as U.S. dollar denominated securitised debt, were beneficial.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 52.93% Was (31-Jul-2021) 51.23%
Other View Top 10 Issuers

Monthly data as of31-Aug-2021

Holdings

Total
Holdings
629
Largest Holding Japan Government Five Year Bond 4.18% Was (31-Mar-2021) 6.51%
Top 10 Holdings 27.10%
Other View Full Holdings Quarterly data as of  30-Jun-2021

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating Below Investment Grade AA
By % 7.93% -7.84%
Fund 8.22% 6.36%
Indicative Benchmark 0.30% 14.20%

Average Credit Quality

A+

Monthly Data as of  31-Aug-2021
Indicative Benchmark:  Bloomberg Global Aggregate Bond Index

Sources for Credit Quality Diversification: Moody's Investors Service and Standard & Poor's (S&P) split ratings (i.e. BB/B and B/CCC) are assigned when the Moody's and S&P ratings differ. Short-Term holdings are not rated.

Maturity View maturity analysis

  Largest Overweight Largest Underweight
Maturity 7-10 Years 1-3 Years
By % 6.53% -10.21%
Fund 22.75% 10.71%
Indicative Benchmark 16.22% 20.92%

Weighted Average Maturity

11.06 Years

Monthly Data as of  31-Aug-2021
Indicative Benchmark:  Bloomberg Global Aggregate Bond Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration 7-10 Years 1-3 Years
By % 8.10% -14.08%
Fund 21.00% 10.23%
Indicative Benchmark 12.90% 24.31%

Weighted Average Duration

7.77 Years

Monthly Data as of  31-Aug-2021
Indicative Benchmark: Bloomberg Global Aggregate Bond Index

31-Dec-2018 - Arif Husain, Head of International Fixed Income,

The portfolio's overall duration was increased over the quarter driven in part by adding to high-quality countries, such as the U.S. and Australia. We also reduced the underweight duration position in the eurozone and moved the UK up to neutral. The changes reflected our expectations that slowing global growth, geopolitics, and trade tensions could fuel a flight into high-quality government bonds.

Country/duration positioning

  • Within developed markets, we began increasing the overweight duration position in the U.S. around mid-October. This was driven by expectations for growth to moderate and the Federal Reserve to slow the pace of interest rate hikes in 2019. Overall, our bias for a flattening of the Treasury yield curve stayed in place as inflation remained well behaved. In the eurozone, we added to Germany in the 7- to 10-year part of the curve and moved Italy back to neutral as budget concerns eased. The overall underweight duration position was reduced as economic growth continued to slow. Over the medium-term, we believe eurozone government bonds are potentially vulnerable as the markets have yet to price in the European Central Bank taking a key step toward monetary policy normalization at the end of 2018 when its quantitative easing program finished.
  • Among other developed market moves, we opened a new overweight duration position in Australia on anticipation that the central bank will keep interest rates unchanged for the foreseeable future, a factor we believe should be supportive for bonds. Meanwhile, in the UK, we closed the underweight duration position in mid-November on uncertainty surrounding the country's exit from the European Union. Toward the end of the period, we opened a new underweight duration position in Canada as we felt that the market was being too pessimistic on the outlook for interest rate hikes.
  • Our allocation to local emerging market bonds remained low during the quarter. In terms of moves, we reduced overweight positions in Mexico and Thailand and took profit on the off-benchmark position in Brazil. We also added modestly to our off-benchmark exposure in domestic Romania on anticipation that inflation pressures could recede. Throughout, we maintained overweight positions in Chile, and off-benchmark exposures in India and South Africa. To balance some of the risks, we maintain a negative bias in Eastern Europe through underweight duration positions expressed in Hungary and Poland.

Currency selection

  • On the currency front, we shifted to an underweight position in the U.S. dollar toward the end of the quarter. This was driven in part by adding to the overweight position in the Swiss franc and opening a new overweight position in the Swedish krona after the central bank raised interest rates for the first time since 2011 in December. Overall, we felt that with U.S. growth slowing and the Fed potentially delivering fewer hikes in 2019, the dollar could be vulnerable to a correction. In other moves, underweight positions in the euro and Australian dollar were closed. Throughout, we maintained an overweight position in the Japanese yen and underweight allocations to the Singapore dollar and Taiwanese dollar.
  • In emerging markets, we added tentatively to a select number of currencies. This included the Mexican peso, the Argentine peso, the South African rand, and the Malaysian ringgit. These complemented existing exposures in the Romania leu and the Colombian peso. The overweight position in the Czech koruna was closed.

Sector allocation and security selection

  • We maintain an allocation to hard currency emerging market sovereign debt as the income stream remains attractive. We also hold modest exposure to European high yield bonds.
  • To reduce portfolio risk, we continue to hold defensive positions in credit markets. The majority of this is expressed through short credit default swap positions in a U.S. investment-grade bond index. In emerging markets, except for Mexico, we closed the credit default swap positions at an individual country level in Turkey, South Africa, and Indonesia.

Sectors

Total
Sectors
6
Largest Sector Government 62.80% Was (31-Jul-2021) 61.63%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2021

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Largest Overweight

Government
By5.07%
Fund 62.80%
Indicative Benchmark 57.73%

Largest Underweight

Agency/Supranationals
By-10.19%
Fund 0.35%
Indicative Benchmark 10.54%

Monthly Data as of 31-Aug-2021

31-Aug-2021 - Arif Husain, Head of International Fixed Income,
We continue to hold a modest overweight position in European and U.S. high yield and have maintained an overweight exposure to hard-currency sovereign debt. Our more neutral stance means that we expect security selection to dominate performance over the next few months.

Countries

Total
Countries
52
Largest Country United States 36.12% Was (31-Jul-2021) 34.43%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2021

Indicative Benchmark: Bloomberg Global Aggregate Bond Index

Largest Overweight

Ireland
By1.74%
Fund 2.12%
Indicative Benchmark 0.38%

Largest Underweight

France
By-5.03%
Fund 0.60%
Indicative Benchmark 5.63%

Monthly Data as of 31-Aug-2021

31-Aug-2021 - Arif Husain, Head of International Fixed Income,
We reduced the portfolio’s overweight duration profile in the period. In the U.S. we rotated exposure into the long end of the curve as a risk hedge ahead of U.S. Federal Open Market Committee minutes and Federal Reserve Chair Jerome Powell’s Jackson Hole speech. Elsewhere, we increased our underweight exposures to both eurozone and UK duration, with higher inflation prints and central bank hawkishness likely to push up yields in our view. In emerging markets, we opened an overweight duration position in the Czech Republic.

Currency

Total
Currencies
32
Largest Currency 40.11% Was (31-Jul-2021) 37.94%
Other View completeCurrency Diversification

Monthly Data as of  31-Aug-2021

Indicative Benchmark : Bloomberg Global Aggregate Bond Index

Largest Overweight

Indian rupee
By 2.04%
Fund 2.04%
Indicative Benchmark 0.00%

Largest Underweight

Offshore Chinese renminbi
By -2.53%
Fund -2.53%
Indicative Benchmark 0.00%

Monthly Data as of  31-Aug-2021

31-Aug-2021 - Arif Husain, Head of International Fixed Income,
We reduced our U.S. dollar underweight in the month. The bringing forward of tapering expectations could prove dollar-supportive, in our view. However, we believe that economic growth outside of the U.S. and the U.S.’s twin deficits may push the dollar down over the medium to long term. In conjunction with this move, we reduced our exposure to a number of emerging markets currencies. This included closing a Czech koruna overweight and instigating an underweight in the Mexican peso. We did, however, close an underweight to the Thai baht in the period, as perceived drags on the country’s growth and fiscal situation may fade in the coming months.

Team (As of 10-Sep-2021)

Arif Husain, CFA

Arif Husain is the head of the International Fixed Income Division. He is a co-portfolio manager for the International Bond and Institutional International Bond Strategies and the lead portfolio manager for the Global Aggregate Bond Strategy. Arif also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Arif’s investment experience began in 1995, and he has been with T. Rowe Price since 2013. Prior to this, Arif was employed by AllianceBernstein in the area of European Fixed Income and Euro Portfolio Management. He also was a member of the global fixed income and absolute return portfolio management teams. Arif also was employed by Greenwich NatWest as an assistant director of European Derivatives Trading and by the Bank of America National Trust and Savings Association.  

Arif earned a B.Sc. (honors) in banking and international finance from City University London, Cass Business School. He also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2016
  • Years at
    T. Rowe Price
    8
  • Years investment
    experience
    25
Quentin S. Fitzsimmons

Quentin Fitzsimmons is a senior portfolio manager in the Fixed Income Division of T. Rowe Price and a member of the global fixed income investment team. He is co-portfolio manager for the Global Aggregate Bond Strategy. He is actively involved in the discussion around country and duration positioning, currency management and sector allocation, with a particular expertise in interest rate management.

Mr. Fitzsimmons has 28 years of investment experience, four of which have been with T. Rowe Price. Prior to joining the firm in 2015, Mr. Fitzsimmons was head of liquidity portfolio investment management, Treasury markets, for the Royal Bank of Scotland Group, where he managed the liquid fixed income "tier one" capital on its balance sheet on an absolute return basis. Previously, he also worked as head of rates and as executive director of fixed income for Threadneedle Investments, where he ran global fixed income portfolios from 2002 to 2012. Prior to Threadneedle he held various fixed income portfolio management and research roles with F&C Investments, the Equitable Life Assurance Society and Sun Life Assurance Company of Canada.

Mr. Fitzsimmons earned a B.Sc. in economics and economic history from the University of Bristol.

  • Fund manager
    since
    2016
  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    30
Stephane Fertat, CFA

Stephane Fertat is the EMEA head of the Investment Specialists Group and a portfolio specialist in the Fixed Income Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Stephane’s investment experience began in 1998, and he has been with T. Rowe Price since 2007, beginning in the Fixed Income Division. Prior to this, Stephane was employed by Fischer Francis Trees and Watts, a global fixed income asset management company, where he worked as a European fixed income fund manager before moving to a product manager role. Stephane also was a director of client service and business development for the southern European distribution team at Fischer Francis Trees and Watts. He also was employed by Société Générale Fimat Investment Management in Chicago.

Stephane earned a master’s degree in finance from Ecole Superieure de Commerce de Paris.

  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    24
Christopher Dillon, CFA

Chris Dillon is an investment specialist in the Multi-Asset Division. He is also a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Chris’s investment experience began in 1993, and he has been with T. Rowe Price since 2006, beginning in the Fixed Income Division. Prior to this, Chris was employed by PNC Advisors as an investment advisory research consultant. He also directed fixed income management research with Smith Barney Consulting Group.

Chris earned a B.A., cum laude, in history/economics from the University of Delaware and an M.B.A. from Wilmington University. He also has earned the Chartered Financial Analyst® designation.

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

  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    24

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% 75 basis points 0.92%
Class I $2,500,000 $100,000 $0 0.00% 45 basis points 0.55%
Class Q $1,000 $100 $100 0.00% 45 basis points 0.62%
Class Sd $10,000,000 $0 $0 0.00% 0 basis points 0.10%

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