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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 Technology Equity Fund

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

ISIN LU1244140163 Bloomberg TRGBTEQ:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

25.53%
$1.4b

1YR Return
(View Total Returns)

Manager Tenure

57.85%
2yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.01
8.54%

Inception Date 15-Jun-2015

Performance figures calculated in USD

31-May-2021 - Alan Tu, Portfolio Manager ,
The current weakness in technology stocks is allowing us to hone our portfolio. We are matching position size with our level of conviction and investing in high-quality stocks that we believe stand to benefit the most from the secular growth of the digital economy across a broad array of vertical markets. It is our disciplined approach, perhaps, that serves us in times like these to look for ways to help our clients achieve their long-term goals.
Alan Tu, CFA
Alan Tu, CFA, Portfolio Manager

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

Click for Manager Outlook
 

Strategy

Manager's Outlook

After a historic stretch of outperformance and strong absolute gains, leading technology stocks struggled somewhat in the first quarter. As the accelerated vaccine rollout boosted hopes for the reopening of the economy, investors favored cyclically sensitive companies and sectors. Investors' enthusiasm for the reopening of the economy also drove a sharp rise in longer-term interest rates, which placed a greater discount on future earnings.

Meanwhile, the fundamentals of our core positions remained intact or even strengthened, with companies reporting strong fourth-quarter earnings and offering solid guidance. Over the short term, we recognize that these strong fundamentals may be offset by other factors. For example, many of our high-conviction names are poised to experience more difficult year-over-year earnings comparisons as we lap the pandemic highs. Moreover, this will probably happen as other parts of the economy are experiencing accelerated earnings growth-although we hope to capture some of this acceleration through our stock selection in payments and media.

Nevertheless, our goal is to provide superior returns over a full market cycle, and we will look to seize opportunities to add to holdings where valuations have improved. We are also taking advantage of our global mandate and research platform to search for opportunities in both developed and emerging markets. While U.S. and Chinese internet titans are coming under increased regulatory scrutiny, governments in many countries are actively nurturing the development of homegrown competitors in online retail and media.

Investment Objective

To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a diversified portfolio of stocks of technology development or utilization companies, with a focus on leading global technology companies. The companies may be anywhere in the world, including emerging markets.

Investment Approach

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

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

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 57.85% 25.53% 27.40% 24.66% 36.23%
Indicative Benchmark % 48.16% 25.42% 27.36% 22.71% 35.62%
Excess Return % 9.69% 0.11% 0.04% 1.95% 0.61%

Inception Date 15-Jun-2015

Manager Inception Date 28-Feb-2019

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of 31-May-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 85.38% 25.97% 27.39% 24.30%
Indicative Benchmark % 71.72% 25.73% 26.30% 22.54%
Excess Return % 13.66% 0.24% 1.09% 1.76%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of 31-Mar-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Jun-2021 Quarter to DateData as of 15-Jun-2021 Year to DateData as of 15-Jun-2021 1 MonthData as of 31-May-2021 3 MonthsData as of 31-May-2021
Fund % 3.85% 9.53% 7.76% -2.90% -0.38%
Indicative Benchmark % 2.93% 7.32% 9.24% -0.93% 4.65%
Excess Return % 0.92% 2.21% -1.48% -1.97% -5.03%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Performance figures calculated in USD

Past performance is not a reliable indicator of future performance.  Source for fund performance: T. Rowe Price. Fund performance is calculated using the official NAV with dividends reinvested, if any. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. It will be affected by changes in the exchange rate between the base currency of the fund and the subscription currency, if different. Sales charges (up to a maximum of 5% for the A Class), taxes and other locally applied costs have not been deducted and if applicable, they will reduce the performance figures. 

Where the base currency of the fund differs from the share class currency, exchange rate movements may affect returns.

Index returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 July 2018, the "net" version of the indicative benchmark replaced the "gross" version of the indicative benchmark. The "net" version of the indicative benchmark assumes the reinvestment of dividends after the deduction of withholding taxes applicable to the country where the dividend is paid; as such, the returns of the new benchmark are more representative of the returns experienced by investors in foreign issuers. Historical benchmark performance has been restated accordingly. 

31-May-2021 - Alan Tu, Portfolio Manager ,
Global technology shares underperformed the MSCI All Country World Index in May. Within the portfolio, stock selection in software detracted from relative performance the most. Shares of Okta sold off due to light guidance for fiscal 2022 earnings along with the completion of its acquisition of Auth0, a security software developer that targets developers. Okta is a cloud-based, software-as-a-service company that helps businesses manage how employees and customers connect to applications. We believe growing demand from enterprises for more robust network security represent strong secular tailwinds for the firm. In addition, we think Okta’s best-of-breed status and flexible, but technologically savvy, solutions represent meaningful competitive strengths. In contrast, stock selection in media and entertainment added the most to relative returns. After dipping early in the period, shares of ROBLOX rallied decisively to finish up this month after first -quarter revenues beat estimates and user engagement metrics remained solid. ROBLOX is an online game developer with a mission to build shared 3D gaming experiences. We are attracted to ROBLOX’s sophisticated developers and their technological capabilities, along with the powerful social network effects it utilises in drawing in new active users.

Holdings

Total
Holdings
52
Largest Holding Sea 6.59% Was (31-Dec-2020) 5.31%
Other View Full Holdings Quarterly data as of  31-Mar-2021
Top 10 Holdings 48.74% View Top 10 Holdings Monthly data as of  31-May-2021

Largest Top Contributor^

Sea
By 2.14%
% of fund 6.59%

Largest Top Detractor^

Zoom Video Communications
By -3.13%
% of fund 6.30%

^Absolute

Quarterly Data as of 31-Mar-2021

Top Purchase

Zoom Video Communications
5.79%
Was (31-Dec-2020) 1.89%

Top Sale

Workday
2.89%
Was (31-Dec-2020) 2.94%

Quarterly Data as of 31-Mar-2021

31-Mar-2021 - Alan Tu, Portfolio Manager ,

With the pullback in technology stocks, we focused on continuing to hone the portfolio so as to fully invest in our highest-conviction stocks as well as add names that could perform well during an economic reopening and over the long term. Doing so will allow us to lean on the high-quality fundamental value these "COVID winners" provide to the portfolio, even if the market should further rotate toward cyclicals and away from growth stocks.

We trimmed in the internet and semiconductor subsectors to fund additional purchases of high-conviction stock picks in other parts of the portfolio, particularly in software.

Software

We trimmed or eliminated positions that showed signs of slowing growth or were no longer tightly aligned with emerging customer needs. With the strong guidance released from many of our current software holdings, we feel confident about the prospects of facing year-over-year comparisons in the coming months between 2021 results and the extreme outcomes we saw in 2020. We believe that these stocks continue to show durable growth.

  • We eliminated our position in Salesforce.com to invest in other companies that can more closely align with emerging customer needs for application integration and customization.
  • We added meaningfully to our position in Zoom Video Communications. We have seen this company use its viral adoption distribution strength to its advantage as it has distanced itself from competitors and reached a mass market scale. It's strategy of under-monetizing its meetings and cloud phone solutions in order to gain near-term share provides it with future revenue potential and gives us incremental confidence in its ability to sustain its growth over the long term.

Internet

We trimmed the overall allocation to internet stocks, while adding new names to the portfolio that we believe will help us increase our participation in the reopening trade, when consumption patterns will likely change. We trimmed U.S. and Chinese mega-cap stocks in favor of researching and funding new investment ideas with potentially less regulatory risk, particularly in emerging markets where many smaller-cap internet companies are often supported, not limited in their activities. We sought to include emerging names that leverage innovative new technologies to improve user experiences.

  • We added to our position in Match Group as it announced its plans to acquire Hyperconnect, a South Korean social media company, Match Group's first venture outside of the online dating market and one that represents a much larger market opportunity for the firm. Match Group owns and operates a global portfolio of online dating services, including Match.com, Tinder, OurTime, and Hinge, among others. With more new relationships starting online, and a majority of those beginning on a Match Group product, we believe the market underestimates the durability of Match Group's earnings growth prospects.
  • Alibaba Group Holding faced a growing number of regulatory hurdles from the Chinese government over the period. While we appreciate Alibaba's powerful position in China's e-commerce and cloud computing market, we pared our exposure throughout the quarter to help balance risk within the portfolio.
  • We initiated a position in Coupang, a leading South Korean e-commerce company. We have confidence in the company's ability to leverage its wide moat in logistics technology to offer consumers better product selection, faster shipping, and lower prices than many of its competitors and, in doing so, continue to grow its market share. We also find value in Coupang's differentiated business strategy that enables it to manage its operating costs better than its competitors.

Semiconductors

We cut back the portfolio's allocation in semiconductors, eliminating several positions that no longer fully compensate our investors for the market risk they convey or manufacture products that are highly cyclical in nature.

  • While we have a favorable view of the company's long-term prospects, we exited Advanced Micro Devices to try to reduce risk and redeploy capital in other areas of the portfolio.
  • Samsung Electronics manufactures memory chips, LCD panels, smartphones, and processors. We eliminated the portfolio's position to harvest profits.

Financial Services

We added to our positions in established global payment platforms. We believe the steady, but growing, cash flows offered by these companies can play an important stabilizing role within the portfolio, especially as economies reopen and more people begin to travel and spend money once again.

  • We increased our position in MasterCard, a global payment brand that earns most of its revenue from service fees from users of its network. We like the steady earnings growth of this global stock, its wide moat, and the strong levels of free cash flow it generates.
  • We added to our position in Visa. We like Visa's leverage to economic expansion, secular growth prospects in electronic payments, and high margins. As travel begins to pick up once again facilitating an increase in higher-margin cross-border transactions, we believe Visa will benefit.

Media

We increased our exposure to emerging technologies and to the potentially valuable opportunities presented by the gradual loosening of COVID-19 restrictions that is underway in many parts of the world.

  • We initiated a position in Roblox Corp, an online gaming platform with a mission to build shared 3D gaming experiences among its users. We are attracted to the firm's sophisticated developer base and their technological capabilities and the powerful social network effects it utilizes in drawing in new active users.
  • We added to our position in Live Nation Entertainment, a leading global live entertainment company engaged in managing artists, owning and operating concert and event venues, ticketing, and event promotion. We believe the firm is well capitalized in the near term and well positioned for a post-pandemic recovery in live entertainment. We value the wide moat that Live Nation Entertainment has built and believe it could lead to strong growth driven, in large part, by the synergy of its high-margin promotion and ticketing businesses.

Industry

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

Regions

Total
Regions
4
Largest Region North America 77.12% Was (30-Apr-2021) 74.22%
Other View complete Region Diversification

Monthly Data as of 31-May-2021

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Pacific Ex Japan
By2.35%
Fund 15.35%
Indicative Benchmark 13.01%

Largest Underweight

Japan
By-3.89%
Fund 0.00%
Indicative Benchmark 3.89%

Monthly Data as of 31-May-2021

Countries

Total
Countries
11
Largest Country United States 72.38% Was (30-Apr-2021) 70.18%
Other View complete Country Diversification

Monthly Data as of 31-May-2021

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Singapore
By7.31%
Fund 7.34%
Indicative Benchmark 0.03%

Largest Underweight

Japan
By-3.89%
Fund 0.00%
Indicative Benchmark 3.89%

Monthly Data as of 31-May-2021

Team (As of 10-Jun-2021)

Alan Tu, CFA

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

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

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

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

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

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 175 basis points 1.87%
Class I $2,500,000 $100,000 $0 0.00% 85 basis points 0.94%
Class Q $1,000 $100 $100 0.00% 85 basis points 0.97%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.06%

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