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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.

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SICAV

Global Focused Growth Equity Fund

Concentrating high conviction positions in leading global investment prospects.

ISIN LU1438969351 Bloomberg TRGFGAE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

17.36%
$3.1b

1YR Return
(View Total Returns)

Manager Tenure

28.80%
8yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

1.69
7.00%

Inception Date 30-Jun-2016

Performance figures calculated in EUR

Other Literature

31-Oct-2020 - David J. Eiswert, Portfolio Manager,
While there are good reasons underlying the significantly rally in equity markets since their lows in late March, we have been very conscious of the need to manage valuation risk. As a result, we have reduced our positions in many of the outright winners with stretched valuations. In many cases, we reinvested proceeds into high-quality, product- and innovation-driven cyclicals, where we identified stock-specific drivers we believe can help accelerate economic returns.
David J. Eiswert, CFA
David J. Eiswert, CFA, Lead Portfolio Manager

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Global equities faced downward pressure in the latter part of the recent quarter, but we do not believe that implies the bursting of an equity or, specifically, a growth equity bubble.� In late spring/early summer, the market began to recognize what we had already been positioning the portfolio for early in the crisis-that certain companies would see their economic futures pulled forward by the coronavirus crisis. These were mainly in the growth area of the opportunity set and led to the unusual outcome that growth showed market leadership before, during, and after the market crisis, albeit supported by greatly superior sales, earnings, and cashflow characteristics.

Several factors have driven the very bifurcated returns we have seen between growth and value stocks, but central to this outcome is the era we live in where capacity continues to be unlocked, fueled by monetary stimulus, and enabled by a new era of technology. The dulling down of the "normal" growth and inflation cycle and the advent of being able to monetize technological innovation in a way that has rarely been so broad has undoubtedly created an unusual backdrop for investors, regardless of investment philosophy.

Massive stimulus and the "stop getting worse" phase of the health crisis have encouraged flows into risk assets, especially certain growth stocks. The direction of the flows has been enhanced by the growth of passive investing and has dovetailed with the most extreme index concentration seen in U.S. equities since 1999, as well as factor-driven investing focused on "momentum" and "growth" characteristics. This is unhelpful in terms of market breadth and for fundamental investors in many senses, but it's a backdrop we've seen and managed through before.

In our view, broad-based valuations are not extreme, but certain areas in the mid-cap and smaller large-cap spectrum do look expensive. While there are good reasons underlying multiple expansion since equity markets troughed in late March, we have been very conscious of the need to manage the valuation element of the risk equation, and have reduced positions in many of the outright winners from the coronavirus pandemic, specifically where we felt valuations had expanded to create risk. In many cases, we reinvested proceeds into high-quality, product- and innovation-driven cyclicals, where we identified stock-specific drivers of accelerating economic returns.� This is not a call for value to "work," given the underlying economic cycle is still being defined by low growth, low inflation, and low interest rates, but rather a set of stock-specific decisions to invest in names that help both our return outlook and portfolio risk characteristics.

We think emerging markets, where we are seeing pockets of good value for quality growth franchises, are extremely interesting. Markets and currencies in countries like India and Indonesia are priced for a fiscal crisis, but we think there are assets in those markets that will be very attractive on the other side of the pandemic. We have an overweight exposure to developed Europe where our holdings are more idiosyncratic and largely not exposed to the European economy and are also overweight Japan. Our underweight exposure to the U.S. is largely driven from the bottom up, but fears of possible corporate tax reform, which could be disruptive, and uncertainty around the upcoming election are real concerns that we continue to monitor.

We feel comfortable with our medium-term outlook for the global economy, corporate profits, and especially the path of improvement for our portfolio holdings and continue to believe in the power of change. We are thinking deeply about the world post-coronavirus and what it may mean for markets and investors and remain vigilant about extreme conditions.

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 that have the potential for above average and sustainable rates of earnings growth. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Single decision maker provides clear accountability.
  • Identify “best ideas” by assessing companies in a global sector context, using bottom-up approach to create focused, high- conviction portfolio.
  • Global research platform uses fundamental analysis to identify companies with superior and sustainable growth prospects, and improving fundamentals.
  • Macroeconomic and local market factors are integrated in stock selection decisions.
  • Valuation appeal is measured against local market and broad sector opportunity set.
  • Broad range of stocks across all capitalizations, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: typically 60-80 stocks
  • Individual positions: Typically 0.5%-5.0%
  • Emerging markets exposure: +/-15% of benchmark
  • Broad sector ranges: +/-15% of benchmark
  • Country ranges: +/-10% of benchmark (U.S.A. is +/-20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%, Maximum 10%
  • Expected tracking error: 400 to 800 basis points

Performance (Class A | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 28.80% 17.36% N/A 19.04%
Indicative Benchmark % 0.46% 5.52% N/A 8.58%
Excess Return % 28.34% 11.84% N/A 10.46%

Inception Date 30-Jun-2016

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Oct-2020

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 31.66% 19.79% N/A 19.78%
Indicative Benchmark % 2.68% 7.41% N/A 9.22%
Excess Return % 28.98% 12.38% N/A 10.56%

Inception Date 30-Jun-2016

Indicative Benchmark: MSCI All Country World Index Net

Data as of  30-Sep-2020

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 25-Nov-2020 Quarter to DateData as of 25-Nov-2020 Year to DateData as of 25-Nov-2020 1 MonthData as of 31-Oct-2020 3 MonthsData as of 31-Oct-2020
Fund % 11.41% 10.12% 33.41% -1.16% 5.45%
Indicative Benchmark % 10.32% 8.36% 5.15% -1.78% 1.72%
Excess Return % 1.09% 1.76% 28.26% 0.62% 3.73%

Inception Date 30-Jun-2016

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country World Index Net

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.

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 - David J. Eiswert, Portfolio Manager,
Global equities lost ground in October amid surging coronavirus cases in the U.S. and Europe, lack of additional fiscal stimulus in the U.S., and uncertainty over the upcoming U.S. election. Within the portfolio, our holdings in the health care sector contributed the most to relative performance. Exact Sciences spiked on strong earnings driven by coronavirus testing revenue, recovery in its core business, and the announced acquisitions of Thrive Detection and Base Genomics. We continue to have high conviction in Exact Sciences and believe the firm’s Cologuard colon cancer screening test offers a long runway for growth. Holdings in financials also boosted relative returns. Discount broker Charles Schwab rose on better-than-expected earnings as balance sheet expansion helped generate higher average interest-earning assets. The stock also spiked at the end of the month after the company reported it would be cutting its workforce in response to the acquisition of TD Ameritrade. We like Charles Schwab’s diverse business model compared to other discount brokers, alongside its top-notch management and history of strong capital allocation. Conversely, an underweight to communication services, coupled with stock selection, hurt relative results. Not owning Alphabet for much of the period detracted as the stock gained ground over the month.

Holdings

Total
Holdings
78
Largest Holding Amazon.com 4.21% Was (30-Jun-2020) 3.57%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 27.67% View Top 10 Holdings Monthly data as of 31-Oct-2020

Largest Top Contributor^

Amazon.com
By 1.02%
% of fund 4.19%

Largest Top Detractor^

Morgan Stanley
By -1.05%
% of fund 2.54%

^Absolute

Quarterly Data as of 30-Sep-2020

Top Purchase

FedEx (N)
2.23%
Was (30-Jun-2020) 0%

Top Sale

Alphabet Class A (E)
0.00%
Was (30-Jun-2020) 1.88%

Quarterly Data as of 30-Sep-2020

30-Sep-2020 - David J. Eiswert, Portfolio Manager,

Trading activity during the quarter was driven from the bottom up. The valuation spread between growth and value continues to expand, so we have been taking a careful and disciplined approach to valuation risk-trimming or eliminating outright winners and reallocating to high-quality names at good prices, especially in cyclical areas where we have identified product- or innovation-driven cycles that should see accelerating economic returns. We want to ensure that the portfolio is balanced between stocks that have more room to run in the current environment and companies that are well-positioned for a post-coronavirus future, and we are using our imagination to envision what that might entail.

Sector-wise, our allocations to industrials and business services and financials increased, as these are areas where we think there are high-quality, idiosyncratic opportunities that are undervalued or should benefit from economic tailwinds. On the other hand, our exposure to health care and communication services decreased as we trimmed or eliminated names that have performed well in the post-March market rally. Regionally, our exposure to Japan increased, while our allocation to developed Europe decreased.

Information Technology

We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. The powerful long-run trends that we believe will drive value creation in the technology sector still remain and, in some cases, have been accelerated by the ongoing pandemic. Aftereffects from the virus outbreak could also result in lasting behavioral changes, with more people working remotely and payment methods skewing more digitally. As a result, software and electronic payments are areas of focus for our sector exposure, but we also remain positioned to benefit from increasing AI adoption as well as the growing technology consumption in emerging markets, particularly in Asia. We also have a sizable exposure to semiconductor stocks that we anticipate should benefit from content growth in automotive and industrial end markets as well as investment in data centers and artificial intelligence.

  • We added to our position in Maxim Integrated Products, a high-performance analog semiconductor company focused on power management. We think Maxim is a leader in the analog power management segment with differentiated products that is well positioned to benefit from the need for leading edge power management solutions for electric vehicles, autonomous driving, and industrial automation.
  • We initiated a position in StoneCo., a Brazilian merchant acquirer. This is a name we have owned in the past, as we think the firm is attacking a huge market ripe for disruption and is in a good position to gain share. With a strong management team and proven execution, the company operates a highly service-oriented model and is introducing cutting-edge technology into Brazil's payments market.
  • We moved on from our position in semiconductor equipment manufacturer LAM Research. The stock has been strong since we first added the name in March, and with valuation fuller, we chose to exit our position in favor of names with greater upside potential.

Financials

Over the quarter, we moved from an underweight position to a modest overweight position, as we took advantage of severe market dislocation in the sector. Traditional developed market financials are facing a difficult environment as leading central banks have cut rates and ramped up quantitative easing measures to help counteract the negative economic impact from the coronavirus. Within the sector, we have exposure to non-traditional financials like security exchanges that have low correlation to the rest of the portfolio and provide support with volatility, online brokerages that don't have the credit risk exposure of banks, and select emerging market banks that we think are undervalued and underappreciated.

  • We reinitiated a position in J.P. Morgan Chase & Co. after eliminating it in the second quarter. While we were initially worried about the firm's credit risk amid a challenging backdrop with the coronavirus pandemic and low interest rates, we now believe the risk of a credit event is low and think the firm's best-in-class business and technology structure, management team, and asset mix should serve it well on the road to economic recovery. The stock pulled back in September as investors reacted to some worse-than-expected data points, including disappointing loan growth and higher than expected expense guidance, which created an attractive entry point.
  • We have a core holding in London Stock Exchange, a UK-based stock exchange and financial information company. We have high conviction in the firm, which owns a number of clearing houses, exchanges, as well as the FTSE/Russell indices. The company's strong position as an information and data provider means it is well equipped to meet the changing demands in financial markets, and the recent acquisition of Refinitiv should be transformational to the firm's business, in our view.

Industrials and Business Services

We believe that in the current lower growth world, many traditional industrials and business services companies have limited potential to accelerate and, as a result, are underweight the sector based on MSCI industrial classifications. As the coronavirus outbreak stalls economic activity, industrial companies face even greater hurdles to grow, at least in the near term. That being said, we meaningfully reduced our underweight over the quarter as we added some more cyclical names that we felt were undervalued due to a challenging backdrop from the pandemic but which we felt were well positioned for accelerating returns over the next year or two We also have more industrial exposure than our weight would imply, as we own several semiconductor and automation companies that are classified as technology, but that we view as more industrial technology.

  • We started a position in global parcel and freight delivery service FedEx. We think FedEx offers a compelling cyclical opportunity due to a number of positive growth drivers that should coalesce over the near term. In particular, the coronavirus has increased demand and tightened capacity, leading to higher pricing for the industry. We also think there are company-specific tailwinds that should help drive accelerating earnings and margin improvement, including better cost synergies and prolonged capacity constraint and pricing strength in air freight, where FedEx has a dominant position.
  • We eliminated our position in U.S. credit bureau Equifax. We think the firm's mortgage segment, which has done well since the pandemic began, will have tough comparables going forward and, in our view, is set to decelerate heading into 2021, so we chose to reallocate funds to names where we have higher conviction.

Health Care

Health care remains a fertile area for growth potential and accelerating technological discovery. One of our largest bets in the portfolio is in health care equipment and supplies, which are typically defensive in an election year given the uncertainty around regulation. The group also has powerful secular drivers such as the ongoing shifts to biologics and robotic surgery as tailwinds. We also have exposure to medical diagnostic and testing companies that continue to benefit from a robust coronavirus testing ecosystem that could last for longer than many expect. We have less exposure to the biopharma space due to possible regulatory change in the form of drug pricing reform, with the names we do own having relatively unique platforms.

  • We eliminated our position in global eye health company Alcon. The stock performed well despite a challenging backdrop, and we felt valuation was full. Therefore, we chose to move on from our position and reallocate funds to names with greater upside potential.
  • We eliminated our position in IDEXX Laboratories on strength. While we still think IDEXX is a great company with compelling growth drivers, the stock has had a significant runup, and we now think valuation is stretched and chose to reallocate to names with greater upside potential.

Sectors

Total
Sectors
10
Largest Sector Information Technology 31.38% Was (30-Sep-2020) 35.62%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Information Technology
Net Contribution 2.34%
Sector
0.69%
Selection 1.64%

Top Detractor

N/A

^Relative

Quarterly Data as of 30-Sep-2020

Largest Overweight

Information Technology
By10.16%
Fund 31.38%
Indicative Benchmark 21.22%

Largest Underweight

Consumer Staples
By-5.34%
Fund 2.50%
Indicative Benchmark 7.85%

Monthly Data as of 31-Oct-2020

31-Oct-2020 - David J. Eiswert, Portfolio Manager,
We have strong conviction in the information technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. The powerful long-run trends that we believe will drive value creation in the technology sector remain and, in some cases, have been accelerated by the ongoing pandemic. The aftereffects of the virus outbreak could also result in lasting behavioural changes, with more people working remotely and payment methods skewing more digitally.

Countries

Total
Countries
18
Largest Country United States 50.63% Was (30-Sep-2020) 49.82%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

India
By2.68%
Fund 3.74%
Indicative Benchmark 1.06%

Largest Underweight

United States
By-7.29%
Fund 50.63%
Indicative Benchmark 57.92%

Monthly Data as of 31-Oct-2020

Currency

Total
Currencies
13
Largest Currency 61.65% Was (30-Sep-2020) 61.11%
Other View completeCurrency Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark :

Largest Overweight

Indian rupee
By 2.58%
Fund 3.64%
Indicative Benchmark 1.06%

Largest Underweight

Hong Kong dollar
By -2.89%
Fund 1.00%
Indicative Benchmark 3.89%

Monthly Data as of 31-Oct-2020

Team (As of 01-Oct-2020)

David J. Eiswert, CFA

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Mr. Eiswert has 19 years of investment experience, 16 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst at Mellon Growth Advisors and Fidelity Management and Research. He also worked as a consultant in the communications industry.

Mr. Eiswert earned a B.A., summa cum laude, in economics and political science from St. Mary's College of Maryland and an M.A. in economics from the University of Maryland, College Park. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    17
  • Years investment
    experience
    20
Josh Nelson

Josh Nelson is a director of research in the U.S. Equity Division of T. Rowe Price. Previously, he was an associate portfolio manager for the Global Focused Growth Equity Strategy. He is an Investment Advisory Committee member of the Global Stock Strategy. He also serves on the Equity Steering Committee. Mr. Nelson is a vice president of T. Rowe Price Group, Inc.

Mr. Nelson has 17 years of investment experience, 12 of which have been with T. Rowe Price. He served as a summer intern with T. Rowe Price in 2006, covering agricultural commodities and ethanol companies. Prior to joining the firm in 2007, he was an investment banker for Citigroup Global Markets, Inc.

Mr. Nelson earned a B.S., with honors, in industrial systems and engineering from the University of Florida. He also earned an M.B.A., with honors, in finance from the University of Pennsylvania, The Wharton School.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    18
Samuel Ruiz

Samuel Ruiz is a portfolio specialist in the Equity Division. He is a vice president of T. Rowe Price Australia Limited. 

Sam’s investment experience began in 2008, and he has been with T. Rowe Price since 2020, beginning as an associate working with the Global Equity and Australia Equity Strategies in the Equity Division. Prior to this, Sam was employed by Macquarie Investment Management in the area of strategy in the Equities Division. 

Sam earned a bachelor of applied finance degree from the University of South Australia.

  • Years at
    T. Rowe Price
    <1 year
  • Years investment
    experience
    0
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    20

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 0.80%
Class Q $1,000 $100 $100 0.00% 75 basis points 0.88%

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