Download

Audience for the document: Share Class: Language of the document:

Download

Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

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

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest

Please enter valid search characters

SICAV

Asian ex-Japan Equity Fund

A diversified fund, with a focus on sustainable growth.

ISIN LU0266341212 Bloomberg TRPAXJA:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

10.66%
$1.1b

1YR Return
(View Total Returns)

Manager Tenure

27.90%
11yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.05
3.30%

Inception Date 28-Jan-2008

Performance figures calculated in USD

Other Literature

31-Dec-2020 - Anh Lu, Portfolio Manager,
We remain constructive on the medium- to longer-term outlook for Asia ex-Japan equities. Valuations have normalised but the gap between the region versus developed markets is still wide. While there are pockets of excessive optimism, we believe that many high-quality growth businesses are still trading at reasonable multiples.
Anh Lu
Anh Lu, Portfolio Manager

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

 

Strategy

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 companies in Asia (excluding Japan).

Investment Approach

  • Employ fundamental analysis to identify companies with sustainable above-market earnings growth rates.
  • Focus on franchise strength, management team quality, free cash flow, and financing/balance sheet structure.
  • Verify relative valuation appeal versus both local market and region.
  • Apply negative screening for macroeconomic and political factors to temper bottom-up enthusiasm for specific securities.

Portfolio Construction

  • 80-120 stock portfolio
  • Individual positions typically range from 0.40% to 5.00% - average position size of 1.00%
  • Country and sector weightings a residual of stock selection. Significant deviations expected.
  • Reserves range from 0% to 10%, but typically less than 5%

Performance (Class A)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 27.90% 10.66% 13.75% 6.86% 10.03%
Indicative Benchmark % 25.02% 8.15% 13.58% 6.50% 9.41%
Excess Return % 2.88% 2.51% 0.17% 0.36% 0.62%

Inception Date 28-Jan-2008

Manager Inception Date 31-May-2009

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 31-Dec-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 27.90% 10.66% 13.75% 6.86%
Indicative Benchmark % 25.02% 8.15% 13.58% 6.50%
Excess Return % 2.88% 2.51% 0.17% 0.36%

Inception Date 28-Jan-2008

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 31-Dec-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Jan-2021 Quarter to DateData as of 15-Jan-2021 Year to DateData as of 15-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % 5.14% 5.14% 5.14% 5.68% 16.99%
Indicative Benchmark % 5.75% 5.75% 5.75% 6.80% 18.60%
Excess Return % -0.61% -0.61% -0.61% -1.12% -1.61%

Inception Date 28-Jan-2008

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Indicative Benchmark: MSCI All Country Asia ex Japan Index 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-Dec-2020 - Anh Lu, Portfolio Manager,
Asia ex-Japan equity markets advanced in December and outperformed their developed market peers. News about vaccine developments and rollout programmes in several countries as well as the U.S. economic stimulus package broadly supported global risk appetites, even as concerns about a new variant of the coronavirus kept gains in check. Within the portfolio, stock selection in India, in particular HDFC Bank, which lagged following November’s sharp advance, dragged. We believe that the high-quality lending franchise of HDFC Bank is best positioned to take market share over the next few years. From a sector perspective, stock choices in communication services curbed returns. Not owning Baidu, a Chinese search engine, hurt as the stock surged following better-than-expected margins in the third quarter. We exited Baidu in November as we viewed its acquisition of a video streaming business as expensive and did not see strong synergy between the company and Baidu’s core business. In contrast, our underweight in China, which underperformed, was beneficial, while stock selection added modestly. Here, China Mengniu Dairy, one of the country’s largest dairy companies, aided performance following its strong quarterly results.

Holdings

Total
Holdings
81
Largest Holding Samsung Electronics 8.63% Was (30-Sep-2020) 7.54%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 47.15% View Top 10 Holdings Monthly data as of  31-Dec-2020

Largest Top Contributor^

Samsung Electronics
By 1.37%
% of fund 9.27%

Largest Top Detractor^

Alibaba Group Holding
By -5.20%
% of fund 6.35%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Taiwan Semiconductor Manufacturing
7.89%
Was (30-Sep-2020) 6.88%

Top Sale

Huayu Automotive Systems (E)
0.00%
Was (30-Sep-2020) 1.18%

Quarterly Data as of 31-Dec-2020

30-Sep-2020 - Anh Lu, Portfolio Manager,

For most of the year, we have steered the portfolio towards high-quality growth names that we think will emerge from the coronavirus crises in a stronger position. These tend to be companies that are leaders in their industry, and which continue to gain share in their sectors under adverse market conditions. We pursued positions in better-quality companies that we found expensive prior to the coronavirus outbreak. We also looked at companies that have a strong capital structure that can allow them to weather a potentially prolonged downturn in business activity.

During the quarter, we sought opportunities among "growth cyclicals." We pursued these businesses with secular growth opportunities but have been impeded by a cyclical downturn due to the coronavirus pandemic. In the quarter, the market favored high-growth names with less proven businesses, but we shifted the portfolio away from those and favored these "growth cyclicals."�

Domestic consumption remains an overarching theme in our portfolio. We believe that Asian households are generally under levered and consumption is a secular opportunity. Across the region, we also favor beneficiaries of import substitution as domestic companies come up with ways to replace imports with local products, especially amid heightened geopolitical tensions.

In China, we look for companies that will benefit from the increasing demand for premium products while across countries there may be opportunities in businesses that will benefit from consolidation in fragmented industries. When we think about our bottom-up stock picks, we also look at the extent of a company's innovation, not merely in the use of technology, but in other ways it seeks to improve market positioning.

We Reduced Allocation in China but Moved into Higher Conviction Names

In China, our largest allocation at period-end, we exited several names where our investment thesis had panned out and was reflected in their stock prices. That gave us room to shift to investment opportunities which are well-managed and show a re-acceleration of growth. We also pursued names that we think are likely to gain market share and those with undiscounted changes or catalysts.�

  • Within China's property sector, for example, we eliminated Shimao Group, a nationwide homebuilder with a focus on Tier 1 and 2 cities, as our thesis of growth acceleration backed by market share gains in a consolidating market has played out. While we remain confident of Shimao's growth, we think rival China Resources Land (CR Land), which is also a shopping mall operator, may benefit more in an environment where volume growth is reaching a peak, and investor attention may focus more on companies with grade A investment portfolios. We think that CR Land, which is part of the well-run state-owned enterprise CR Group, has some of the best retail assets in China. Moreover, it has a disciplined balance sheet with low gearing and funding cost.� In a declining margin or return environment, companies with low funding cost will be more competitive and profitable. A low gearing balance sheet also means CR Land can accelerate growth if needed. Within the CR Group, there could also be some future catalysts such as the spinoff of its property management arm.
  • Within the consumer discretionary sector in China, we consolidated the travel-related names that we owned, focusing more on domestic travel. Hence, we eliminated our position in Trip.com, China's dominant online Chinese travel agency, taking advantage of its share price recovery after a sharp fall in the first quarter. While its second-quarter results were better than expected, outbound travel remains at a minimal level. Our base case is for domestic travel to fully recover next year and international travel the year after. While we exited Trip.com, we initiated a position in Huazhu Group, where we have higher conviction as we view it as one of the most efficient and leading hotel operators in China that can potentially lead the consolidation of non-branded hotels.
  • Still within consumer discretionary, we sold out of Pinduoduo, an ecommerce firm where Tencent holds a stake, locking in gains.
  • We eliminated our position in Songcheng Performance, one of the better-managed, show-based theme park operators in China, which we viewed as a beneficiary of domestic travel and leisure growth. The stock rallied on news of China allowing group tours and cross province travel. However, we think that the stock has discounted the expected acceleration in earnings growth ahead of new park openings in 2021 and 2022.
  • Among household durables, we exited Haier Electronics as the privatization thesis has played out, with controlling shareholder Haier Smart Home taking its household appliance maker unit private.� Instead, we added to our position in Gree Electric Appliance, China's largest air conditioner manufacturer, which declared an interim dividend, positive news on corporate governance, and has completed its channel destocking. We started a position in Gree last year amid its improving shareholding structure. Its state-owned parent sold part of its stake in the company to an investment fund. This state-owned enterprise reform plan will likely result in improved corporate governance, better channel efficiency, a potential rerating and further market consolidation.
  • Outside of China's consumer discretionary sector, we eliminated PICC Property & Casualty, one of the country's largest property and casualty insurance companies, as the departure of its well-respected chairman and risk management issues cast a pall on our thesis of an improving return on equity. Aside from these, continued concerns on auto reform deregulation and elevated combined operating ratio from floods dragged down its share price. We decided to redeploy funds to higher conviction ideas such as life insurer AIA, which has an inimitable footprint in southeast Asia and a growing China business.

We Boosted Positions in Taiwanese Semiconductor and Retail Names

We bought more shares of Taiwanese semiconductor names amid the prospect of their continued earnings growth. We added to our stake in MediaTek, a fabless design house which in our view remains a key 5G solution provider for Chinese smartphone makers even as the U.S. expanded its curbs on Huawei Technologies. MediaTek is the only non-US independent 5G solution supplier globally.

Outside of IT, we bought more shares in President Chain Store, a franchisee for the 7-Eleven convenience stores in Taiwan, as valuations are more palatable following a stock price correction. Moreover, we started to feel more comfortable about the macro environment in Taiwan and while the coronavirus pandemic has severely affected its Philippine business, we think the Philippines remains an attractive market for convenience store operators over the medium to long term. At the end of the quarter, these changes led to a reduced underweight allocation in Taiwan.

We Invested in Lagging Names with Growth Prospects in the Utilities Sector

We invested in two new companies within the utilities sector with good growth prospects, taking advantage of their share price weakness. This significantly reduced our underweight allocation in this sector. We established a position in China Resources Gas, a gas distribution company. In China, we view gas distribution as an attractive sector with multiple tailwinds. We like the sector as it enjoys government policy support, volume growth, continuing gas consumption growth compared to other energy sources, and potential merger and acquisition opportunities. We also initiated a position in Guangdong Investments, a well-run water distribution and sewage treatment company, following sharp share price weakness due to concerns about the impact of the coronavirus pandemic on the earnings of its non-water division. We think the company, which provides natural water to Hong Kong, is committed to maintaining its dividend per share growth as the impact of the pandemic on its business is likely to be temporary.

Within Industrials, We Added an Electrical Equipment Maker Poised for Further Growth

Within the industrials sector, we own companies that are gaining market share and expanding margins such as the abovementioned Shenzhen Inovance. During the quarter, we initiated a position in NARI Technology, which makes electrical equipment and counts China's major state-owned grid companies as key customers. It has a leading position in secondary power grid equipment. We view NARI as a good quality company which will benefit from the digitalization of China's power grid. The company should see a re-acceleration of growth from next year due to the higher power grid upgrades. In the near term, its revenue is expected to grow faster in the second half of 2020 as orders in grid automation and information and communications increase. It has a cash generative and recurring business and we believe its position is well entrenched as many of its equipment items are vital and related to safety.

Sectors

Total
Sectors
10
Largest Sector Information Technology 25.80% Was (30-Nov-2020) 23.85%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor^

Financials
Net Contribution 1.64%
Sector
-0.00%
Selection 1.64%

Top Detractor^

Consumer Discretionary
Net Contribution -0.71%
Sector
0.12%
Selection
-0.84%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Consumer Staples
By4.00%
Fund 8.97%
Indicative Benchmark 4.97%

Largest Underweight

Materials
By-3.41%
Fund 0.89%
Indicative Benchmark 4.31%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Anh Lu, Portfolio Manager,
Consumer staples accounts for our largest sector overweight position given that domestic consumption is an overarching theme in our portfolio. We have exposure to several companies with steady growth prospects and strong cash generative characteristics like convenience store operators. We favour food retailers, drugstore companies, and a beer maker. One of our larger holdings is China Mengniu, one of the country’s largest dairy companies. It delivered strong quarterly results and its management was bullish on prospects for the business, driven by higher demand for milk products. We believe the business is on a sustainable path towards better margins.

Countries

Total
Countries
11
Largest Country China 40.52% Was (30-Nov-2020) 43.01%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor

N/A

Top Detractor

N/A

Largest Overweight

Hong Kong
By2.40%
Fund 9.77%
Indicative Benchmark 7.36%

Largest Underweight

China
By-3.69%
Fund 40.52%
Indicative Benchmark 44.21%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Anh Lu, Portfolio Manager,
China remains our largest country position in absolute terms. However, we have a sizeable underweight in this market after some recent trades, which reflected our lack of ownership in Chinese banks, electric vehicle makers that have been the subject of retail investors’ fervor, and an underweight in ecommerce platforms. We prefer to own cyclical growth stocks with high-quality businesses and the potential to take market share as the region recovers from the pandemic. For example, we favour owning a quality auto glass maker in China that we view as a market share gainer. In India, we have a position in a high-quality lending franchise.

Team (As of 15-Jan-2021)

Anh Lu

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

Ms. Lu has 24 years of investment experience, 18 of which have been with T. Rowe Price. Prior to joining the firm, she was a vice president of the Asia Pacific Technology Investment Banking Division of Salomon Smith Barney in Hong Kong. Before Salomon Smith Barney, Ms. Lu spent three years at LGT Asset Management as an analyst and portfolio manager.

Ms. Lu earned a B.A. with honours from the University of Western Ontario.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    19
  • Years investment
    experience
    25
Nick Beecroft, CFA

Nick Beecroft is the APAC head of the Investment Specialist Group and a portfolio specialist in the Equity Division. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Nick’s investment experience began in 2001, and he has been with T. Rowe Price since 2005, beginning in the Equity Division. Prior to this, Nick was employed by Mercer Investment Consulting as an investment analyst.

Nick earned a B.A., with honors, in contemporary European studies from the University of Southampton. 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
    19

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% 160 basis points 1.72%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.81%
Class Q $1,000 $100 $100 0.00% 75 basis points 0.87%

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