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)

19.55%
$1.0b

1YR Return
(View Total Returns)

Manager Tenure

34.54%
1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.10
8.77%

Inception Date 15-Jun-2015

Performance figures calculated in USD

Other Literature

31-May-2020 - Alan Tu, Portfolio Manager ,
We believe that the powerful trends that we invest behind—most of which relate to the digitalisation of the economy—remain in place, regardless of any near-term disruptions stemming from the coronavirus pandemic. However, some of these growth trends may accelerate due to shifts in consumer and enterprise behaviour associated with the pandemic. We continue to invest opportunistically, especially in instances where we believe short-term market dislocations create compelling risk/reward profiles over a longer time frame.
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

he portfolio wasn't immune to the heightened volatility and sharp sell-off in equity markets. However, despite all the uncertainty, our relative performance benefited from our exposure to areas of the technology sector where the coronavirus pandemic has accelerated some of the powerful secular trends that we favor: growth in e-commerce, the rise of streaming video, and the digitization of the enterprise--especially the adoption of cloud-based communication software.

Extreme events often catalyze meaningful changes. Many of the innovative technology companies that we prefer are attacking huge addressable markets and must battle inertia to persuade customers that pursuing new ways of doing things is worth the effort. Moments like the current crisis can push enterprises and consumers to embrace changes much faster than they would under normal circumstances. Broadly speaking, this should support the powerful secular trends that we tend to invest behind.

In these uncertain times, we have relied on our disciplined investment process and insights from our global research platform to take advantage of the target-rich environment while stress testing our holdings to avoid potential liquidity issues and permanent losses. We do not know how long the current crisis will persist or how deep the pain will be, but we will remain opportunistic and firmly focused on the ideas that we believe have the potential to create significant value when we emerge on the other side.

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.

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 % 34.54% 19.55% 20.98% 20.53% 27.49%
Indicative Benchmark % 31.85% 22.25% 20.14% 19.53% 31.58%
Excess Return % 2.69% -2.70% 0.84% 1.00% -4.09%

Inception Date 15-Jun-2015

Manager Inception Date 28-Feb-2019

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  30-Jun-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 34.54% 19.55% 20.98% 20.53%
Indicative Benchmark % 31.85% 22.25% 20.14% 19.53%
Excess Return % 2.69% -2.70% 0.84% 1.00%

Inception Date 15-Jun-2015

Indicative Benchmark: MSCI All Country World Index Information Technology Net

Data as of  30-Jun-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 09-Jul-2020 Quarter to DateData as of 09-Jul-2020 Year to DateData as of 09-Jul-2020 1 MonthData as of 30-Jun-2020 3 MonthsData as of 30-Jun-2020
Fund % 9.44% 9.44% 36.10% 8.79% 34.75%
Indicative Benchmark % 4.24% 4.24% 16.97% 7.58% 30.00%
Excess Return % 5.20% 5.20% 19.13% 1.21% 4.75%

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-2020 - Alan Tu, Portfolio Manager ,
Global technology shares outperformed the MSCI All Country World Index in May. Within the portfolio, stock selection in software added value. Our underweight position in Microsoft contributed to the portfolio’s relative performance. Shares in the technology giant lagged the benchmark and broader software subsector, reflecting investors' preference for high-growth companies during the recovery rally. Crowdstrike Holdings has developed a cloud-based security platform that collects and analyses massive amounts of data to rapidly identify and respond to potential attacks. The stock rallied on the market's view that demand for end-point security solutions could accelerate as the rise in remote work increases the number of vulnerable devices outside an enterprise's protective firewall. Not owning information technology services stocks lifted the portfolio’s relative returns. We believe this subsector contains many traditional businesses that could face pressure as enterprises embrace cloud infrastructure and software. Conversely, media and entertainment held back relative results slightly, due to our above-benchmark allocation to the subsector.

Holdings

Total
Holdings
46
Largest Holding Alibaba Group Holding 8.70% Was (31-Dec-2019) 9.86%
Other View Full Holdings Quarterly data as of 30-Jun-2020
Top 10 Holdings 39.24% View Top 10 Holdings Monthly data as of 30-Jun-2020

Largest Top Contributor^

Amazon.com
By 0.93%
% of fund 6.54%

Largest Top Detractor^

Alibaba Group Holding
By -2.10%
% of fund 8.79%

^Absolute

Quarterly Data as of 31-Mar-2020

Top Purchase

Crowdstrike Holdings (N)
2.25%
Was (31-Dec-2019) 0.00%

Top Sale

Facebook
4.27%
Was (31-Dec-2019) 8.24%

Quarterly Data as of 31-Mar-2020

31-Mar-2020 - Alan Tu, Portfolio Manager ,

We used the broad-based sell-off in equities to lean into investment ideas that we believe offer compelling risk/reward profiles, with an emphasis on names that should survive the coronavirus pandemic and associated economic contraction and emerge in an even better competitive position for the long term. These moves involved leaning opportunistically into investments that we believe could benefit from an acceleration in key secular trends and buying high-quality names that the market had punished because their underlying businesses face significant near-term risks.

Software

We continue to regard the business models and growth runways available in cloud-based enterprise software as some of the most compelling over the long term. Broadly speaking, we leaned into investment ideas where we see the potential for existing secular trends to accelerate while paring names that could face sales disruptions in the near term.

  • We initiated a position in Avalara, a company that specializes in cloud-based software that calculates customers' sales tax obligations across U.S. states and counties as well as international markets. We believe that, as a leader in its field, Avalara should benefit from continued growth in e-commerce.
  • We added to Shopify, which provides an online commerce platform for small to mid-size businesses. In our view, Shopify stands to benefit from the secular transition to e-commerce, a long-term trend that behavioral shifts stemming from the coronavirus outbreak could accelerate. We recognize that the company could face challenges as some of its customers face existential threats from supply-side disruptions and reduced demand. Regardless of the potential for near-term pain, we believe that a vibrant ecosystem of small to mid-size businesses should remain an important part of the economy on the other side of this crisis and that these operations increasingly will want to sell their goods and services online.
  • We trimmed ServiceNow and Salesforce.com, with the bulk of these sales occurring prior to the sharp sell-off in equity markets. Although we acknowledge that both companies could experience near-term sales disruptions because of the coronavirus outbreak, we expect their cloud-based platforms to benefit over the long term as enterprises accelerate their digital transformations to enhance business continuity and competitiveness.

Internet

Our internet holdings focus on platform companies that we believe have significant competitive advantages and compelling long-term growth prospects. Although we reduced the portfolio's overall exposure to internet stocks, we took advantage of broad-based weakness to increase our number of holdings in this subsector.

  • We pared Tencent Holdings and Alibaba Group Holding, the dominant e-commerce player in China. Nevertheless, we remain confident in these internet giants' long-term growth stories, as their core businesses benefit from powerful secular trends and they continue to leverage their popular platforms' network effects to pursue adjacent opportunities.
  • We trimmed Facebook. We acknowledge that coronavirus-driven macroeconomic weakness is likely to weigh on near-term demand for Facebook's online advertising solutions, especially among small to mid-size businesses. Nevertheless, we expect the economic downturn to strengthen Facebook's competitive position relative to traditional advertising outlets and believe our investment thesis remains intact. We continue to monitor regulatory developments and recognize that news on this front could increase volatility in Facebook's stock.
  • We initiated a position in Trip.com (formerly Ctrip.com International), China's dominant online provider of travel services. The stock sold off sharply, as the coronavirus outbreak in China and other countries depressed demand for domestic and international travel. Near-term challenges aside, we value Trip.com's potential to compound free cash flow over the long haul as demand for travel grows with household incomes in China.

Semiconductors

We refined the portfolio's semiconductor positioning. We recognize that semiconductor companies' financial results likely will take a hit from demand uncertainty and supply chain disruptions in the near term. At the same time, low inventories after last year's downcycle suggest that key segments of this subsector should benefit when economy activity eventually recovers. Over the long term, we believe the secular trend of increasing demand for advanced chips in data centers, artificial intelligence, automobiles, and industrial end markets remains intact.

  • We exited Texas Instruments, a leader in analog semiconductors, and Marvell Technology, a digital semiconductor company that specializes in storage controllers, ethernet switches, and enterprise connectivity.
  • We started a position in Infineon Technologies, a global leader in power semiconductors. Although the company's financial results should take a hit in the near term from severe weakness and disruptions in the automotive end market, we expect the company to benefit over the long term from several tailwinds, including growing adoption of renewable energy, the increasing electrification of vehicle subsystems, and the ever-expanding internet of things.
  • We added to Applied Materials, a leading supplier of semiconductor capital equipment. In our view, Applied Materials should benefit over the long term as customers step up spending to meet demand for memory chips and drive innovation in logic chips. We believe the market does not appreciate the company's growth prospects once the recovery cycle takes hold in key semiconductor markets.

Financial Services

We increased the portfolio's position in this subsector opportunistically, focusing on names that offer exposure to growth in online and mobile payments as e-commerce continues to take share. Near-term uncertainties aside, we believe that the lasting behavioral shifts driven by the health crisis could accelerate the uptake of electronic payments and online shopping.

  • We added to Visa and MasterCard. We like the companies' leverage to the transition away from cash to electronic payments as e-commerce continues to grow. We also value the business models' pricing power and capacity to generate free cash flow.
  • We initiated a position in Adyen, a European company that boasts an experienced management team and has developed, in house, what we regard as one of the best payment processing platforms available. An appealing fee structure and superior technology that results in fewer rejections and real-time access to sales data should enable the company to take market share while benefiting from secular shifts toward digital payments and mobile e-commerce.

Industry

Total
Industries
19
Largest Industry Internet Media/Advertising 20.75% Was (30-Jun-2019) 20.67%
Other View complete Industry Diversification

Monthly Data as of 31-Jul-2019

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Internet Media/Advertising
By20.74%
Fund 20.75%
Indicative Benchmark 0.01%

Largest Underweight

IT Services
By-14.55%
Fund 1.38%
Indicative Benchmark 15.93%

Monthly Data as of 31-Jul-2019

31-May-2020 - Alan Tu, Portfolio Manager ,
We increased the portfolio’s exposure to semiconductors, focusing on memory chipmakers and beaten-down stocks 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 eventually recovers. We were active in the software subsector, initiating some positions and trimming other holdings where viewed the risk/reward profile as less compelling.

Regions

Total
Regions
5
Largest Region North America 74.81% Was (31-May-2020) 75.76%
Other View complete Region Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

Pacific Ex Japan
By4.94%
Fund 15.02%
Indicative Benchmark 10.08%

Largest Underweight

North America
By-4.06%
Fund 74.81%
Indicative Benchmark 78.87%

Monthly Data as of 30-Jun-2020

Countries

Total
Countries
11
Largest Country United States 71.58% Was (31-May-2020) 73.41%
Other View complete Country Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark: MSCI All Country World Index Information Technology

Largest Overweight

China
By7.10%
Fund 8.32%
Indicative Benchmark 1.22%

Largest Underweight

United States
By-5.76%
Fund 71.58%
Indicative Benchmark 77.35%

Monthly Data as of 30-Jun-2020

Team (As of 10-Jul-2020)

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.

Download

Latest Date Range
Audience for the document: Share Class: Language of the document:
Download Cancel

Download

Share Class: Language of the document:
Download Cancel
Sign in to manage subscriptions for products, insights and email updates.
Continue with sign in?
To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
Continue Cancel
Once registered, you'll be able to start subscribing.

By clicking the Continue button, I acknowledge that I have read and accepted the Privacy Notice

Continue Back

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®). 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

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