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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

US Equity Fund

Formerly US Large-Cap Equity Fund

Style agnostic investing in larger US companies.

ISIN LU1319833791 Bloomberg TRUSLIE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

12.57%
$885.8m

1YR Return
(View Total Returns)

Manager Tenure

48.19%
4yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

-0.13
4.84%

Inception Date 08-Jul-2016

Performance figures calculated in EUR

28-Feb-2021 - Jeff Rottinghaus, Portfolio Manager ,
Rapid progress on the development of several vaccines is clearly the most positive sign for the year ahead. As the pandemic hopefully recedes and economies reopen, a broader economic recovery is likely to benefit many of the sectors that were most damaged by the virus. While this could also bring an accelerated earnings recovery, it might not translate into strong equity returns, with much of the recovery already priced into the markets.
Jeff Rottinghaus
Jeff Rottinghaus, Portfolio Manager

Jeff Rottinghaus is a portfolio manager in the U.S. Equity Division. He is president of the US Large-Cap Core Equity Strategy and chairman of its Investment Advisory Committee. In addition, he is a vice president and an Investment Advisory Committee member of the US Quantitative U.S. and US Dividend Growth Strategies. Jeff also is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Rapid progress with a first wave of new vaccines is clearly the most positive sign for the year ahead. As the pandemic hopefully recedes and economies reopen, a broader economic recovery is likely to benefit many of the sectors that were most damaged by the virus. While a rapid economic recovery could also bring an accelerated earnings recovery, this might not translate into strong equity returns, with much of the recovery already priced into the markets. We are also mindful that aggressive monetary and fiscal stimulus measures that have helped fuel the sustained recovery in equities, and the potential for additional stimulus in 2021, could lead to higher inflation over time.

After initial expectations for a divided government, Democrats ultimately won control of the White House as well as both chambers of Congress after a Senate runoff election was held during the first few days of 2021. Markets may begin to factor in the likelihood of more progressive policies on taxes and tighter regulation, which could result in a negative market shock. We are monitoring these risks, although the narrow margins in the House and Senate could make sweeping regulatory or tax policy changes unlikely.

Going forward, it will be critical to seek out companies that appear well positioned to emerge from the pandemic with lasting competitive advantages, while avoiding firms that face longer-term secular challenges. We believe careful fundamental research will be necessary to find opportunities, and we will continue to search for investment opportunities in select areas of the market, utilizing our bottom-up stock selection approach. As always, we rely on our global research team of industry specialists to uncover fundamentally sound companies and remain committed to providing quality, risk-adjusted returns over the long term.

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 from large capitalization companies in the United States.

Investment Approach

  • Carefully constructed portfolio of the portfolio manager’s highest conviction investment ideas supported by our deep pool of U.S. equity analysts.
  • Core style targeting attractive opportunities across the investable universe irrespective of growth or value style.
  • Investment process that:
    • leverages the stock selection capabilities of our global research team;
    • emphasizes fundamental bottom-up stock selection;
    • is combined with an in-depth valuation assessment;
    • has rigorous portfolio construction.
  • Active risk management process integrated throughout our analysis.
  • Focused Large-Cap approach with stock selection the primary source of value added.
  • High conviction portfolio takes meaningful bets based on rigorous proprietary research.

Portfolio Construction

  • Roughly 50-60 securities.
  • Invest in high conviction ideas over a two-year time horizon.
  • Typical position size range: +/- 4% relative to the benchmark.
  • Sector weights: Generally limited to +/- 10% relative to the benchmark.
  • Expected tracking error: targeting 400 basis points.
  • Expected active share: targeting 70% or greater.

Performance (Class In | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 48.19% 12.57% N/A 11.62%
Indicative Benchmark % 52.99% 13.19% N/A 12.93%
Excess Return % -4.80% -0.62% N/A -1.31%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Data as of 31-Mar-2021

Performance figures calculated in EUR

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 48.19% 12.57% N/A 11.62%
Indicative Benchmark % 52.99% 13.19% N/A 12.93%
Excess Return % -4.80% -0.62% N/A -1.31%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Data as of 31-Mar-2021

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 13-Apr-2021 Quarter to DateData as of 13-Apr-2021 Year to DateData as of 13-Apr-2021 1 MonthData as of 31-Mar-2021 3 MonthsData as of 31-Mar-2021
Fund % 3.45% 3.45% 9.57% 3.89% 5.92%
Indicative Benchmark % 4.18% 4.18% 10.36% 4.36% 5.92%
Excess Return % -0.73% -0.73% -0.79% -0.47% 0.00%

Inception Date 08-Jul-2016

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

Indicative Benchmark: S&P 500 Index Net Hedged to EUR

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.

28-Feb-2021 - Jeff Rottinghaus, Portfolio Manager ,
U.S. stocks generally rose in February, although the major indices closed below their best levels of the month as concerns about inflation took hold. Within the portfolio, energy had the largest negative impact due to an underweight allocation. The sector produced strong double-digit returns and outperformed all other sectors in the index. We are underweight energy as we see challenging long-term supply/demand dynamics for the sector; we continue to expect energy prices to remain muted amid higher crude oil production in North America and slower growth in demand. Our overweight allocation to utilities also hurt as the sector underperformed the broader index. Conversely, the industrials and business services sector had the largest positive impact on relative results due to stock selection and an overweight allocation. Passenger air carrier Delta Air Lines performed well amid optimism that the ongoing COVID-19 vaccine rollout will improve travel demand. Industrial conglomerate GE also outperformed. We are optimistic about the efforts of new CEO Larry Culp to strengthen the company’s balance sheet and improve operations. We also see value in GE’s Aerospace division.

Holdings

Total
Holdings
65
Largest Holding Microsoft 5.87% Was (30-Sep-2020) 5.98%
Other View Full Holdings Quarterly data as of  31-Mar-2021
Top 10 Holdings 31.16% View Top 10 Holdings Monthly data as of  31-Mar-2021

Largest Top Contributor^

Alphabet
By 1.69%
% of fund 4.17%

Largest Top Detractor^

Waste Connections
By -0.06%
% of fund 1.39%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Broadridge Financial Solutions (N)
1.04%
Was (30-Sep-2020) 0%

Top Sale

PNC Financial Services Group (E)
0.00%
Was (30-Sep-2020) 1.36%

Quarterly Data as of 31-Dec-2020

31-Dec-2020 - Jeff Rottinghaus, Portfolio Manager ,

Within the portfolio, our positioning is mainly driven by fundamental, stock-specific views. During the quarter, we selectively added to high-quality names with attractive valuations and strong balance sheets. Conversely, we trimmed names where we did not have complete confidence in their balance sheets or where we found better risk/reward ideas. We will continue to look for high-quality companies that have opportunities to increase their market share or have barriers to entry around their business that will allow them to grow organically in a variety of market environments.

Industrials and Business Services

Within the industrials and business services sector, where many names are cyclically tied to either infrastructure or capital spending, we seek to invest in companies with exposure to diverse end markets that feature solid business models and strong cash flow generation. Our largest sector holdings are Union Pacific, Honeywell International, and Waste Connections.

  • We initiated a position in Howmet Aerospace, which provides advanced engineered solutions for the aerospace and transportation industries. We like the company's exposure to commercial aerospace, which we believe will see continued recovery over the next two years as travel demand increases and airlines purchase new aircraft to expand their fleets.
  • We initiated a stake in Caterpillar, a leading manufacturer of construction and mining equipment as well as engines and turbines, as we believe the construction market still has room for recovery. We like the company's high market share and durability created by the dealer network. Longer term, we are bullish on new management's strategy to shift toward a more value-added mix of products and services.
  • We eliminated Stanley Black & Decker, a manufacturer of industrial tools and household hardware and provider of security products and locks. The company saw a strong fundamental recovery in 2020 as consumers spent more money on do-it-yourself projects during the coronavirus pandemic and we believe it will face higher comps than industrial peers in 2021.

Financials

We are overweight financials given our constructive outlook on consumer credit as well as the property and casualty insurance market, which we believe is poised to benefit from rising policy premiums following several catastrophic events. Our focus is on owning high-quality companies that have strong balance sheets, leading industry positions, and diversified revenue streams. Our largest industry weights are in capital markets, including Morgan Stanley and Intercontinental Exchange, and insurance, including Marsh & McLennan and Chubb.

  • We initiated a position in global investment bank Goldman Sachs. The company is beginning to transition away from capital-intensive business lines in favor of consumer banking, private equity, and wealth management, which we believe will be beneficial to the stock over the long term. We are optimistic about management's ability to execute this transition and believe Goldman Sachs has attractive risk/reward potential.
  • We eliminated our position in PNC Financial Services Group on recent strength and reallocated the proceeds to higher-conviction bank names in the portfolio.

Consumer Discretionary

The sector is composed of a diverse group of industries, including retailers, auto manufacturers, and hotel and restaurant operators. We have exposure to the hotels, restaurants, and leisure industry through McDonald's and Yum! Brands. We also have a meaningful position in Amazon.com, which we believe is poised to benefit from growth in online shopping and is also a major player in the cloud computing space.

  • We added to our position in Dollar Tree, an operator of discount variety stores. We like management's plan to improve operations at Family Dollar through store renovations and talent recruitment and retention. We also like that discount variety stores are more insulated from e-commerce competition.

Communication Services

The communication services sector comprises a wide range of media and entertainment and telecommunication services companies. The sector is one of our largest underweight positions relative to the S&P 500 Index; we are most underweight the entertainment and media industries. Our largest sector holdings are in Alphabet and Facebook.

  • Verizon Communications features a leading U.S. wireless network. While we like the company's high-quality wireless network and strong management team, we believe the business faces threats from rising competitive intensity in the wireless space, and we utilized relative strength to reduce our position size.

Sectors

Total
Sectors
10
Largest Sector Information Technology 23.69% Was (28-Feb-2021) 24.25%
Other View complete Sector Diversification

Monthly Data as of 31-Mar-2021

Indicative Benchmark: S&P 500 Index

Top Contributor^

Health Care
Net Contribution 0.32%
Sector
-0.09%
Selection 0.40%

Top Detractor^

Energy
Net Contribution -0.50%
Sector
-0.50%
Selection
-0.00%

^Relative

Quarterly Data as of 31-Mar-2021

Largest Overweight

Industrials & Business Services
By3.24%
Fund 12.11%
Indicative Benchmark 8.87%

Largest Underweight

Communication Services
By-3.26%
Fund 7.66%
Indicative Benchmark 10.93%

Monthly Data as of 31-Mar-2021

28-Feb-2021 - Jeff Rottinghaus, Portfolio Manager ,
We are overweight financials given our constructive outlook on consumer credit as well as the property and casualty insurance market, which we believe is poised to benefit from rising policy premiums following several catastrophic events. Our focus is on owning high-quality companies that have strong balance sheets, leading industry positions, and diversified revenue streams. Within financials, our largest absolute industry allocation is in capital markets, where we have positions in Morgan Stanley and Intercontinental Exchange; and insurance, including Marsh & McLennan and Chubb.

Team (As of 14-Apr-2021)

Jeff Rottinghaus

Jeff Rottinghaus is a portfolio manager in the U.S. Equity Division. He is president of the US Large-Cap Core Equity Strategy and chairman of its Investment Advisory Committee. In addition, he is a vice president and an Investment Advisory Committee member of the US Quantitative U.S. and US Dividend Growth Strategies. Jeff also is a vice president of T. Rowe Price Group, Inc.

Jeff’s investment experience began in 2001 when he joined T. Rowe Price, beginning in the U.S. Equity Division. Prior to this, Jeff was employed by Ernst & Young as a financial consultant. Jeff also was part owner of software consulting firm Kelly Levey & Associates.

Jeff earned a B.S. in business administration from Bowling Green State University and an M.B.A. in finance from the University of Pennsylvania, The Wharton School. He is a certified public accountant.

  • Fund manager
    since
    2016
  • Years at
    T. Rowe Price
    19
  • Years investment
    experience
    20
Eric Papesh, CFA, BA, MBA

Eric Papesh is a portfolio specialist based in London in the U.S. Equity Division. Eric supports the US Smaller Companies Equity and US Large-Cap Equity Income Strategies offered in the Europe, Middle East, and Africa and Asia-Pacific regions. Eric is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Eric’s investment experience began in 1994, and he has been with T. Rowe Price since 2014, beginning in the ISG division as a portfolio specialist. Prior to this, Eric was employed by Russell Investments where he focused on U.S. equity investment strategies.

Eric earned a B.A. in business administration, with concentrations in finance and information systems, and an M.B.A. in business administration from the University of Washington. Eric has earned the Chartered Financial Analyst® designation.

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

  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    26

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% 150 basis points 1.62%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.70%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.77%

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