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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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SICAV

Japanese Equity Fund

Seeking to uncover the best investment opportunities across the Japanese equity spectrum.

ISIN LU0230817925 Bloomberg TRPJAEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(EUR)

9.52%
€1.9b

1YR Return
(View Total Returns)

Manager Tenure

16.87%
6yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

1.27
6.43%

Inception Date 16-Dec-2005

Performance figures calculated in EUR

Other Literature

31-Oct-2020 - Archibald Ciganer, Portfolio Manager,
With Japanese companies having strong cash positions, and corporate governance standards continuing to improve—even as profits have come under pressure—the asset class is an attractive investment proposition, in our view. Japanese equities also trade at a discount to regional peers. As we enter the next stage of the equity cycle and the evolution of domestic and international political governance progresses, we believe the expected global economic recovery next year will provide a cyclical tailwind for Japan.
Archibald Ciganer
Archibald Ciganer, Portfolio Manager

Archibald Ciganer is the portfolio manager of the Japan Equity Strategy in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Japan, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

The big development during the quarter of Prime Minister Shinzo Abe's resignation due to ill health was taken negatively on concerns his reform and dovish agenda would be canceled. However, we have been encouraged by his replacement, Yoshihide Suga, and the early signs are also reassuring. He has already introduced a Digital Reform Agency and seems even more focused than his predecessor on the economic reforms that we believe Japan requires.

With Japanese companies in net cash and corporate governance standards continuing to improve-even as profits have come under pressure-the asset class is an attractive investment proposition, in our view, and trading at a discount to regional peers. As we enter the next stage of the equity cycle and the evolution of domestic and international political governance, we continue to believe that Japan is a compelling active management case given the market is under-owned and that it displays positive change dynamics. We also believe the expected global economic recovery next year will provide a cyclical tailwind for Japan.

Investment Objective

To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a widely diversified portfolio of stocks of companies in Japan.

Investment Approach

  • Macroeconomic factors have a role, but our approach is primarily bottom-up and research driven.
  • Growth opportunities are found across the capitalization spectrum and across market sectors.
  • Risk is managed at stock, sector, and cap-range levels.
  • Portfolio rebalancing is an effective risk management tool.

Portfolio Construction

  • Typically 80-110 stock portfolio
  • Minimum individual position size is 0.40%
  • Individual position sizes can range +/- 2.00% relative to the benchmark
  • Sector weightings vary from +/- 10% of the benchmark
  • Tracking error expected to range between 300 and 600 bps
  • Target reserves less than 5%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 16.87% 9.52% 12.23% 12.60% 13.17%
Indicative Benchmark % -4.23% 1.06% 4.09% 8.05% 7.61%
Excess Return % 21.10% 8.46% 8.14% 4.55% 5.56%

Inception Date 16-Dec-2005

Manager Inception Date 26-Dec-2013

Indicative Benchmark: TOPIX Index Net

Data as of  31-Oct-2020

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 19.73% 11.85% 14.30% 12.61%
Indicative Benchmark % -0.52% 3.49% 6.50% 8.14%
Excess Return % 20.25% 8.36% 7.80% 4.47%

Inception Date 16-Dec-2005

Indicative Benchmark: TOPIX Index Net

Data as of  30-Sep-2020

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 27-Nov-2020 Quarter to DateData as of 27-Nov-2020 Year to DateData as of 27-Nov-2020 1 MonthData as of 31-Oct-2020 3 MonthsData as of 31-Oct-2020
Fund % 11.80% 11.15% 24.57% -0.59% 14.50%
Indicative Benchmark % 10.85% 9.45% 3.85% -1.26% 9.17%
Excess Return % 0.95% 1.70% 20.72% 0.67% 5.33%

Inception Date 16-Dec-2005

Indicative Benchmark: TOPIX Index Net

Indicative Benchmark: TOPIX 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 June 2019, 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 - Archibald Ciganer, Portfolio Manager,
Global equity market volatility was heightened in October amid uncertainty about the outcome of the U.S. presidential election and the increase in coronavirus cases and subsequent lockdowns in Europe. Japanese equities fell over the month but outperformed their developed market peers. In the portfolio, our large overweight position in SoftBank Group was a top contributor. Investor optimism on the telecommunication and internet conglomerate’s ongoing plans to pare down debt and increase shareholder returns through buy-backs supported the stock. Money Forward, a provider of accounting software services, also had a strong month. The firm’s recurring revenues have continued to increase steadily as it expands its services to target larger clients. The biggest detractor from relative performance was our overweight holding in Net One Systems, a company that specialises in network products and services. The involvement of a current employee in the misuse of funds led the company to postpone its second-quarter earnings release, as the development could have an impact on current and past results.

Holdings

Total
Holdings
57
Largest Holding SOFTBANK GROUP CORP 6.00% Was (30-Jun-2020) 5.59%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 39.13% View Top 10 Holdings Monthly data as of 31-Oct-2020

Largest Top Contributor^

SOFTBANK GROUP CORP
By 1.13%
% of fund 5.95%

Largest Top Detractor^

Hoshizaki
By -1.84%
% of fund 4.60%

^Absolute

Quarterly Data as of 30-Sep-2020

Top Purchase

Hoshizaki
4.58%
Was (30-Jun-2020) 5.19%

Top Sale

Miura
2.91%
Was (30-Jun-2020) 3.51%

Quarterly Data as of 30-Sep-2020

30-Sep-2020 - Archibald Ciganer, Portfolio Manager,

We kept portfolio turnover low in the third quarter after increasing our exposure to quality cyclical companies in the previous three-month period, with a view to benefiting from their potential outperformance as earnings expectations improve from depressed levels.

Machinery

We took some profits in core holding Miura, a manufacturer of efficient gas-powered boilers, as shares have reached record highs. It has seen growth both in its dominant domestic and its international business. The latter has been helped by the reopening of the Chinese economy.

We added to our position in commercial kitchen manufacturer Hoshizaki. The company has a large domestic presence but is also expanding overseas. The coronavirus pandemic has been a severe hit to growth and earnings this year - as commercial kitchens have closed due to virus containment measures - but we believe earnings will recover sharply as companies look to automate and improve kitchen services in response to the pandemic.

We also increased our position in Fujitec, a manufacturer of escalators and elevators. In our view, the company's cyclical nature means that it stands to benefit as earnings expectations improve from depressed levels. Furthermore, we believe that the company is undergoing a period of transformation that will lead to it making better use of cash.

IT and Services

We topped up our holding in UT Group, the provider of temporary staffing services for Japanese manufacturers. While its operations have taken a hit from the coronavirus, the company's prospects stand to improve as the domestic and global economies recover. Demographic and social changes continue to create opportunities for innovative business models in staffing.

Real Estate

We increased our position in Industrial & Infrastructure Fund Investment Corp (IIF), a real estate investment trust that invests in infrastructure assets (25%), manufacturing factories/research and development centers (20%), and logistics facilities (55%). IIF is a defensive income generator with solid dividend growth potential.

Raw Materials and Chemicals

We added to our holding in Sumitomo Seika Chemical, a manufacturer of industrial chemicals and pharmaceutical products. We anticipate that an important catalyst for the stock will be improving supply/demand dynamics for its key product.

Sectors

Total
Sectors
12
Largest Sector It & Services & Others 37.86% Was (30-Sep-2020) 37.57%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: TOPIX Index

Top Contributor^

Information Technology
Net Contribution 1.96%
Sector
0.04%
Selection 1.92%

Top Detractor^

Communication Services
Net Contribution -0.29%
Sector
0.20%
Selection
-0.49%

^Relative

Quarterly Data as of 30-Sep-2020

Largest Overweight

It & Services & Others
By18.80%
Fund 37.86%
Indicative Benchmark 19.06%

Largest Underweight

Banks
By-4.74%
Fund 0.00%
Indicative Benchmark 4.74%

Monthly Data as of 31-Oct-2020

31-Oct-2020 - Archibald Ciganer, Portfolio Manager,
Information technology and services remains the portfolio’s largest sector overweight. We established a position in a company mainly engaged in the provision of face-to-face payment terminals and payment processing services. Its focus is on the replacement of old payment infrastructure, and the company has a track record in supporting the switch to cashless payments in various industries and businesses in the offline payment field. The government’s policy to promote cashless payments should be supportive of earnings growth.

Team (As of 01-Oct-2020)

Archibald Ciganer

Archibald Ciganer is the portfolio manager of the Japan Equity Strategy in the International Equity Division. He is a vice president of T. Rowe Price Group Inc. and T. Rowe Price Japan, Inc. 

Archibald’s investment experience began in 1999 and he has been with T. Rowe Price since 2007, beginning in the International Equity group. Archibald began his career as a credit analyst with BNP Paribas in Japan. Subsequently, he served as an associate in the firm's Investment Banking Department and most recently as a vice president in Mergers and Acquisitions, where he handled a number of cross-border transactions for blue chip Japanese and foreign corporates.

Archibald earned a B.A. in finance and accounting from Institut d'Etudes Politiques de Paris (sciences po.). Archibald has also earned the Chartered Financial Analyst® designation.

  • Fund manager
    since
    2013
  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    21
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 (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A €1,000 €100 €100 5.00% 160 basis points 1.71%
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 0.86%

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