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Global Natural Resources Equity Fund

Seeking to identify long-term global winners in the arena of natural resources extraction and production.

ISIN LU1382644919 Bloomberg TRPGNQR:LX

3YR Return Annualised
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Total Assets


1YR Return
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Manager Tenure


Inception Date 18-Mar-2016

Performance figures calculated in GBP

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31-Jul-2019 - Shawn T. Driscoll, Portfolio Manager,
We believe the global commodities market is in middle of a long-term, secular downcycle. Although countercyclical rallies in oil prices can occur, we believe any periods of outperformance will likely be brief, due to a declining cost curve and the disruptive effects of short-cycle shale production. Nevertheless, we continue to find pockets of opportunity in several areas of the market.
Shawn T.  Driscoll
Shawn T. Driscoll, Portfolio Manager

Shawn Driscoll is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Natural Resources Strategy and is president and chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

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Manager's Outlook

We continue to believe that the global commodities market is in the midst of a long-term, secular downcycle, although there will be periods of cyclical disruption. The recent strength in oil prices, fueled both by tensions with Iran and a pivot in the Federal Reserve's monetary policy, is the latest instance of a break in the longer-term trend. In our view, the market has started to see the sustainable disruptive impact of U.S. shale production growth, which we expect to continue to flatten the cost curve and put a ceiling on oil prices. We expect any periods of oil and commodity outperformance to be brief. Whereas some market participants have called for a return to higher prices, we expect oil prices to settle into a new long-term average in the $40 to $50 per barrel range. We note, however, that this outlook ultimately depends on the degree to which technological innovation continues to improve productivity and drive down costs.

Since November 2014, we have seen volatility in the markets for commodities and high-yield debt, with prices trading in a wide cyclical range. We expect this volatility to persist and will continue to make tactical portfolio adjustments as appropriate in the context of a secular downcycle in commodities. Although the opportunity set in natural resources has narrowed as commodities prices trend lower over time and balance sheets come under pressure, we are still finding pockets of opportunity in several areas of the market:

    • Majors and integrated oil companies with clean balance sheets and a significant number of financial and operating levers to pull.
    • Commodity-related companies that stand to benefit from relatively low input costs and growing demand from end markets, including specialty chemicals and packaging.
    • Regulated utilities that can maintain durable growth in a low interest rate environment, with an emphasis on natural gas utilities.
    • Companies with lower financial leverage and no hidden counterparty risk, given the bankruptcy potential in the commodities marketplace.
    • Industries, including specific segments of utilities, chemicals, and metals, with exposure to the emerging electric vehicle theme stand to benefit from disruption and boast long runways for growth.
    • Energy exploration and production companies that are able to cut costs and maintain growth, with North American shale producers among the best examples.

We remain committed to our bottom-up stock selection process and our philosophy of buying and holding a diverse selection of fundamentally sound natural resources companies with solid balance sheets and talented management. Our expansive global research platform continues to assist in identifying those companies that can provide long-term capital appreciation for our clients. Even if the near-term environment poses challenges, we believe the market will reward our disciplined and consistent approach to investing over the long term.

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 widely diversified portfolio of stocks of natural resources or commodities-related companies. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Focus on well-managed companies that own or develop natural resources and other basic commodities with attractive long-term supply-demand fundamentals.
  • Invest in companies that operate “downstream” from these resources, e.g., refining, paper manufacturing, steel fabrication, and petrochemicals.
  • The portfolio invests in resource companies on a global basis including — international energy, forest products, mining, and commodities.
  • Assessment of resource/commodity cycle, industry valuation, and company fundamentals is key.
  • Broadly diversify holdings to manage portfolio risk profile relative to highly concentrated energy or gold strategies.

Portfolio Construction

  • Typically 90-120 securities
  • Positions typically range to 5%
  • Reserves typically range from 0% to 5%

Performance (Class Q | GBP)

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Fund % -8.65% 2.05% N/A 7.60%
Indicative Benchmark % -10.14% 3.80% N/A 9.07%
Excess Return % 1.49% -1.75% N/A -1.47%

Inception Date 18-Mar-2016

Indicative Benchmark: MSCI World Select Natural Resources Index Net

Data as of  31-Aug-2019

  1 YR 3 YR
5 YR
Since Inception
Fund % -4.40% 5.45% N/A 8.97%
Indicative Benchmark % -5.80% 6.89% N/A 11.01%
Excess Return % 1.40% -1.44% N/A -2.04%

Inception Date 18-Mar-2016

Indicative Benchmark: MSCI World Select Natural Resources Index Net

Data as of  30-Jun-2019

Performance figures calculated in GBP

Recent Performance

  Month to DateData as of 13-Sep-2019 Quarter to DateData as of 13-Sep-2019 Year to DateData as of 13-Sep-2019 1 MonthData as of 31-Aug-2019 3 MonthsData as of 31-Aug-2019
Fund % 2.02% -0.90% 12.89% -5.43% 4.04%
Indicative Benchmark % 3.12% -1.23% 12.60% -5.49% 2.48%
Excess Return % -1.10% 0.33% 0.29% 0.06% 1.56%

Inception Date 18-Mar-2016

Indicative Benchmark: MSCI World Select Natural Resources Index Net

Indicative Benchmark: MSCI World Select Natural Resources Index Net

Performance figures calculated in GBP

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 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-Jul-2019 - Shawn T. Driscoll, Portfolio Manager,
Commodity prices were mixed in July. West Texas Intermediate crude oil prices recovered from concerns about macroeconomic weakness and ended the month incrementally higher, as Iran stoked regional tensions and fears of potential supply disruptions when it seized two tankers in the Strait of Hormuz. Natural gas prices slipped on abundant supplies. Silver prices led the way among precious metals, while platinum and gold prices also finished higher. Iron ore prices increased by almost 10%, lifted by expectations that the supply/demand balance will remain tight in the second half of 2019. Within the portfolio, our underweight allocation to diversified metals and mining—especially the industry’s largest operators—boosted relative results. We believe the industry is one of the more challenged spaces within the natural resources complex over a longer time frame. Stock selection and an above-benchmark allocation to specialty chemicals also added value. Shares of sealings and coatings company RPM surged after the company reported fourth-quarter earnings per share that beat the consensus estimate, thanks to cost savings and favourable pricing trends. Conversely, stock selection in integrated oil and gas weighed on relative performance, as France-based Total and Norway-based Equinor lagged


Largest Holding Total 5.00% Was (31-Mar-2019) 4.78%
Other View Full Holdings Quarterly data as of 30-Jun-2019
Top 10 Holdings 26.93% View Top 10 Holdings Monthly data as of 31-Aug-2019

Largest Top Contributor^

By 1.99%
% of fund 4.98%

Largest Top Detractor^

Concho Resources
By -0.35%
% of fund 2.63%


Quarterly Data as of 30-Jun-2019

Top Purchase

Was (31-Mar-2019) 1.49%

Top Sale

Was (31-Mar-2019) 1.77%

Quarterly Data as of 30-Jun-2019

30-Jun-2019 - Shawn T. Driscoll, Portfolio Manager,

Our bearish outlook for oil prices and belief that we are in the middle of a secular downcycle for commodities have not changed. Accordingly, we continue to favor defensive industries and areas of the natural resources universe, such as specialty chemicals, that stand to benefit because lower commodity prices reduce their input costs. However, we remain aware of the potential for signs of�further economic weakness�to weigh on�cyclical names and have sought to emphasize idiosyncratic growth stories that can provide a bit of a buffer against macro headwinds. As always, we remain conscious of valuation, industry fundamentals, and longer-term risk/reward propositions. In the second quarter, this prompted us to add exposure to well-positioned containerboard companies that we�believe should�benefit from secular demand tailwinds related to e-commerce and a rebalancing market. Among commodity producers, we prefer high-quality names that can deliver strong, low-cost output growth without sacrificing their balance sheets. Despite our long-term outlook, we are not�averse to taking advantage of the countercyclical rallies that crop up during secular bear markets. We also continue to explore electric vehicles and other disruptive trends that could create risks and opportunities in our investment universe. Our bottom-up approach to stock selection helps us assess this evolving landscape and make informed, long-term investment decisions.

Allocation to Energy Industrials

We high-graded our exposure in energy industrials, rotating into higher-conviction�stocks that we believe�traded at undemanding valuations�and/or offered exposure to�idiosyncratic growth stories that could prove resilient in a challenging environment.

  • We established a position in CNH Industrial, a company that produces agricultural equipment and commercial vehicles. Although we like the quality of the company's core businesses, under-earning business�segments and macro headwinds have weighed on the stock's performance. At current valuations, we believe�CNH Industrials�offers a favorable risk/reward profile that should afford some downside protection while we wait for an inflection in�the company's�underlying businesses.
  • We added to the portfolio's stake in Epiroc, a high-quality mining equipment company that boasts a debt-free balance sheet and generates a significant portion of its revenue from services. In our view, Epiroc's growing service business, which aims to improve miners' productivity, should compound value for shareholders over time. We also believe that equipment orders could grow significantly once replacement cycles kick in and the industry steps up development of greenfield mining sites.
  • We sold shares of Ball, a global leader in aluminum packaging, on strength. In our view, the company should continue to benefit from growing demand as aluminum packaging replaces less sustainable options and cans take market share in cocktails and wines.
  • We eliminated Pentair from the portfolio after the company pre-announced quarterly results that fell well short of guidance, raising questions about execution. We also had concerns about Pentair's leverage to residential construction.

Oil and Gas Storage and Transportation

The portfolio finished the quarter with an overweight allocation to the oil and gas storage and transportation industry, though we refined our positioning to emphasize ideas that we believe have the�most compelling�risk/reward profiles. The best-positioned companies in this space stand to benefit as hydrocarbon output from low-cost U.S. shale plays continues to increase. These stocks tend to fare better when interest rates are lower because of their dividend yields and the reduced credit risk for their counterparties in oil and gas exploration and production.

  • We eliminated the portfolio's stake in Royal Vopak, a Netherlands-based company that owns a global portfolio of tank terminals that store gases, chemicals, and oil.
  • We sold some of the portfolio's stake in TC Energy, which owns pipelines and other energy infrastructure in Canada and the U.S., on strength to manage position size. We like TC Energy's resilient cash flows and leverage to expansion opportunities created by growing North American oil and gas production.
  • We initiated a position in Targa Resources, an oil and gas gathering and processing company that has built an integrated system of pipelines and other critical energy infrastructure in the Permian Basin. We value Targa Resources' expansion opportunities as hydrocarbon output from West Texas continues to increase and see the potential for�the company's�financial condition to improve as these projects generate incremental cash flow.

Paper and Forest Products

International containerboard prices have tumbled�from their peak in�the back half of 2018, pressured by macro-driven demand deterioration and supply-side capacity additions that have increased inventories. These headwinds have already prompted leading producers to reduce their operating rates to help rebalance the market. Despite this near-term weakness, our long-term outlook for the industry remains favorable. We believe industry consolidation should help to moderate the cyclicality in containerboard pricing, while a rising capital-incentive curve and the increasing penetration of e-commerce provide long-term tailwinds. We started or added to positions in high-quality containerboard producers.

  • We exited Australia-based packaging company Orora in favor of investment ideas that we believe offer better risk/reward profiles.
  • We established a position in Packaging Corporation of America, the U.S. containerboard producer with the least exposure to international exports. We value the company's highly integrated business and disciplined management team, qualities that should help the company to sustain its superior profitability relative to peers.
  • We added to International Paper, a leading producer and distributor of containerboard and other paper products. As with Packaging Corporation of America, this position is a bet that cyclical weakness eventually will give way to secular and structural tailwinds.
  • Shares of West Fraser Timber and Interfor came under pressure from weakness in spot lumber prices. We continue to believe the market does not appreciate the extent to which the scarcity of timber in British Columbia has pushed the region to the higher end of the cost curve. In our view, this dynamic favors West Fraser Timber and Interfor, both of which have favorable geographic mixes that include meaningful exposure to the low-cost U.S. South.

Diversified Metals and Mining

The portfolio remained underweight the diversified metals and mining industry. A global oversupply of many metals and mining commodities is expected to be a headwind for this segment throughout much of this secular bear market in commodities. We continue to believe the industry is one of the more challenged spaces within the natural resources complex over�a longer time frame. We remain defensively positioned with the names we do own, focusing on companies with solid balance sheets and sound records of capital allocation.

  • We initiated a position in Australia-based South32, a diversified mining outfit that boasts a strong balance sheet and continues to execute its plan of harvesting cash from its existing assets while incrementally improving the quality of its portfolio through sound capital allocation and strategic divestments. We like the company's high-quality management team and regard this stock as a value story that will play out over time.
  • We eliminated the portfolio's position in Aurubis, a global copper smelter and recycler, in favor of opportunities that we believe have better risk/reward profiles.
  • In May, shares of Boliden pulled back on concerns about the macro environment, the head of smelting's departure, and disappointing free cash flow in the first quarter. In our view, the zinc and copper mining and smelting company ranks among the highest-quality names in diversified metals and mining, thanks to a strong management team, solid balance sheet, and history of allocating capital intelligently through the cycle.

Allocation to Utilities

We appreciate utilities for their defensive qualities but remain selective and valuation-conscious, focusing on names that should be able to deliver solid cash flow and dividend growth during periods of deceleration in the broader economy. The portfolio again ended the quarter with a significantly above-benchmark allocation to utilities.

  • We increased the portfolio's position in NextEra Energy's common stock. In our view, the company's utility franchise stands to benefit from a supportive regulatory environment and ample opportunity to invest in�clean energy, storage, and grid reliability. The utility is also the leading U.S. developer of renewable energy, a distinction that we believe gives it the expertise and scale to take advantage of growing demand for (and the declining cost of) wind and solar power. These opportunities should enable the company to compound shareholder value over time.
  • We reduced the portfolio's exposure to NiSource in favor of other investment opportunities.
  • We took advantage of recent strength to take some profits on Atmos Energy and manage our position size. In our view, the gas utility should be able to grow its cash flow and dividend at a steady clip, thanks to a long runway for system�investment and a supportive regulatory environment.

Allocation to Chemicals

Our bearish long-term outlook for commodities makes chemicals an area of focus, thanks in part to the potential margin uplift from lower input costs. However, with key end markets showing signs of slowing down and concerns about potential overcapacity in the polyethylene, we prefer names that operate high-quality businesses, have the most levers to pull to offset weakness, and/or offer exposure to potential upside drivers that are independent of the macro environment. Specialty chemicals and industrial gases finished the quarter as the portfolio's largest overweight allocations at the industry level.

  • We exited industrial gas company Air Liquide on valuation.
  • We started a position in Westlake Chemical, a leading U.S. producer of polyethylene that opportunistically diversified into chor-alkali and polyvinyl chloride (PVC) via its 2016 acquisition of Axiall. Although potential capacity concerns and the uncertain macro backdrop make us cautious on commodity chemicals producers, we regard Westlake Chemical as a value play because the market has not priced in improving fundamentals in the chlor-alkali market. We also like management's history of allocating capital intelligently during past downcycles and its sizable ownership stake.
  • We increased the portfolio's position in Linde, as we like the potential for�the industrial gas company�to drive margin expansion as it realizes projected cost synergies from its�combination with�Praxair. We also appreciate the company's high-quality management team, defensive qualities, and potential to compound value for shareholders.


Largest Sector Chemicals 18.11% Was (31-Jul-2019) 17.88%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: Lipper Global Natural Resources Funds Index

Largest Overweight

Fund 18.11%
Indicative Benchmark 4.28%

Largest Underweight

Metals & Mining
Fund 10.73%
Indicative Benchmark 20.90%

Monthly Data as of 31-Aug-2019

31-Jul-2019 - Shawn T. Driscoll, Portfolio Manager,
Major and integrated oil companies appeal to us because of their clean balance sheets, financial strength, and the benefits of scale. In our view, these qualities position the best of these companies to drive productivity gains and capital efficiency. We believe our highest-conviction holdings should be able to grow their hydrocarbon output in a cost-conscious manner and have exhibited a commitment to returning capital to shareholders. On an absolute basis, integrated oil and gas finished the period as the portfolio’s largest industry allocation, although we remain underweight relative to the benchmark.


Largest Country United States 58.45% Was (31-Jul-2019) 59.44%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: Lipper Global Natural Resources Funds Index

Largest Overweight

United States
Fund 58.45%
Indicative Benchmark 54.65%

Largest Underweight

United Kingdom
Fund 6.96%
Indicative Benchmark 11.98%

Monthly Data as of 31-Aug-2019

31-Jul-2015 - Shawn T. Driscoll, Portfolio Manager,
From a country perspective, our allocation to Norway saw the largest percentage increase during the month of July. There were no notable reductions for the period.


Largest Currency U.S. dollar 64.78% Was (31-Jul-2019) 65.58%
Other View complete Currency Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark : MSCI World Select Natural Resources Index

Largest Overweight

U.S. dollar
By 13.65%
Fund 64.78%
Indicative Benchmark 51.13%

Largest Underweight

Canadian dollar
By -7.47%
Fund 4.70%
Indicative Benchmark 12.17%

Monthly Data as of 31-Aug-2019

Team (As of 31-Aug-2019)

Shawn T.  Driscoll

Shawn Driscoll is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Natural Resources Strategy and is president and chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Mr. Driscoll has 15 years of investment experience, 12 of which have been with T. Rowe Price. Prior to joining the firm in 2006, he was employed by MTB Investment Advisors as an equity research analyst. He also worked for MPower Communications as an information technology project manager.

Mr. Driscoll earned a B.A. in economics and mathematics from the University of Rochester and an M.B.A. in finance and global business from New York University, Leonard N. Stern School of Business.

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Brian Dausch

Brian Dausch is a portfolio specialist in the U.S. Equity Division of T. Rowe Price. He is a member of the Global Natural Resources Equity, US Mid-Cap Growth Equity, US Small-Cap Growth Equity, QM US Small-Cap Growth Equity, and Health Sciences Strategy teams, working closely with institutional clients, consultants, and prospects. Mr. Dausch is a vice president of T. Rowe Price Group, Inc.

Mr. Dausch has 21 years of investment experience, 20 of which have been at T. Rowe Price. He joined the firm in 1998; prior to his current position, he managed the U.S. Equity Portfolio Analysis Group. Mr. Dausch also served as an associate research analyst in the U.S. Equity Division in health care, specializing in biotechnology and pharmaceutical company research.

Mr. Dausch earned a B.S. in business administration, with a concentration in finance, from the University of Delaware. He also has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
  • Years investment

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% 160 basis points 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.83%
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92%

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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