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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 Large-Cap Value Equity Fund

Invest in large US companies with hidden value and potential overlooked by the market majority.

ISIN LU0133100338 Bloomberg TRPULVI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

4.07%
$564.7m

1YR Return
(View Total Returns)

Manager Tenure

1.34%
18yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.09
4.67%

Inception Date 27-Mar-2002

Performance figures calculated in USD

Other Literature

31-Dec-2020 - Heather McPherson, Portfolio Manager,
The outlook for U.S. equities remains uncertain. Although the market has reacted favourably to the U.S. presidential elections, near-term volatility remains. Due to the increasingly concentrated nature of the large-cap segment, headline market indices disguise the weakness of companies exposed to cyclical and secular concerns. Given this, we believe our long-term investment horizon will be useful as we seek to identify companies that look attractive under a more “normalised” environment.
John D.  Linehan, CFA
John D. Linehan, CFA, Co-Portfolio Manager

John D. Linehan is the portfolio manager for the U.S. Large Cap Equity Income Strategy, U.S. Select Value Strategy and co-portfolio manager for the US Large-Cap Value Equity Strategy in the U.S. Equity Division. In addition, he is the chief investment officer of Equity and a member of the firm's U.S. Equity Steering and Equity Brokerage and Trading Control Committees. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

 

Strategy

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 that are selling at discounted valuations relative to their historical average and/or the average of their industries.

Investment Approach

  • Focus on relative value relationships to opportunistically identify attractively valued companies.
  • Fundamental research is key to uncovering companies with potential for stock price mean reversion.
  • Integrate qualitative inputs to assess potential for improved investor perception.
  • Verify relative valuation anomalies through quantitative analysis.
  • Balance valuation analysis and qualitative overlay.

Portfolio Construction

  • Typically 70-80 stock portfolio
  • Individual positions typically are below 3%, but higher conviction ideas can range to 5%
  • Sector weights will typically vary from 0.5X to 2.0X of primary value sectors of the Russell 1000 Value Index
  • Reserves will range from 0% to 2%

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 1.34% 4.07% 8.49% 9.56%
Indicative Benchmark % 2.01% 5.26% 8.91% 9.69%
Excess Return % -0.67% -1.19% -0.42% -0.13%

Inception Date 27-Mar-2002

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of 31-Dec-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 1.34% 4.07% 8.49% 9.56%
Indicative Benchmark % 2.01% 5.26% 8.91% 9.69%
Excess Return % -0.67% -1.19% -0.42% -0.13%

Inception Date 27-Mar-2002

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of 31-Dec-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 22-Jan-2021 Quarter to DateData as of 22-Jan-2021 Year to DateData as of 22-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % 4.19% 4.19% 4.19% 2.60% 19.27%
Indicative Benchmark % 2.60% 2.60% 2.60% 3.78% 16.05%
Excess Return % 1.59% 1.59% 1.59% -1.18% 3.22%

Inception Date 27-Mar-2002

Indicative Benchmark: Russell 1000 Value Net 30% Index

Indicative Benchmark: Russell 1000 Value Net 30% Index

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 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-Dec-2020 - Heather McPherson, Portfolio Manager,
U.S. stocks posted gains in December, with most indices hitting all-time highs at various stages of the month. Financials and information technology (IT) outperformed, while utilities and industrials and business services lagged. The rollout of the first highly effective vaccines against the coronavirus boosted sentiment throughout December, although confidence appeared to waver at times as hospitalisations and daily U.S. deaths reached new highs. Investors also welcomed a USD 900 billion pandemic-related fiscal relief package as part of a larger spending bill that funds the federal government through the end of September 2021. Early in the month, U.S. weekly jobless claims jumped to their highest level since September, while the Commerce Department reported that retail sales and household incomes contracted 1.1% in November. Within the portfolio, IT had the most negative impact due to security selection. Shares of Texas Instruments ended the month modestly higher but trailed the broader sector, which lagged on news of additional Chinese trade restrictions. Our stock choices in health care also hurt. Conversely, the consumer discretionary sector added value, thanks to stock selection and an underweight allocation. Our security choices in real estate were also beneficial.

Holdings

Total
Holdings
87
Largest Holding Morgan Stanley 3.16% Was (30-Sep-2020) 2.88%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 26.32% View Top 10 Holdings Monthly data as of  31-Dec-2020

Largest Top Contributor^

Morgan Stanley
By 0.01%
% of fund 3.16%

Largest Top Detractor^

Ameren
By -0.02%
% of fund 0.85%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Citrix Systems (N)
0.74%
Was (30-Sep-2020) 0%

Top Sale

Verizon Communications (E)
0.00%
Was (30-Sep-2020) 1.24%

Quarterly Data as of 31-Dec-2020

30-Sep-2020 - Heather McPherson, Portfolio Manager,

We remain focused on our valuation discipline and are looking for opportunities to buy high-quality companies that have been overly discounted, many of which have cyclical exposure.

Consumer Staples

We typically focus our efforts in the consumer staples sector on companies with strong brands and that are trading at attractive valuations relative to their peers and/or history. We also like the stable earnings and dividend yields that consumer staples stocks tend to provide.

  • We built a position in Coca-Cola, a global marketer of nonalcoholic beverages. Although the company was negatively impacted by decreased on-premise consumption during the coronavirus pandemic as restaurants were shut down, we remain encouraged by Coca-Cola's improved fundamentals over recent years. Additionally, in our view, the company is trading at an attractive relative valuation. We believe Coca-Cola has the potential to be a multiyear turnaround story.
  • We sold shares of leading health and personal care product company Kimberly-Clark. The stock has benefited from strong execution and stockpiling behavior since the beginning of the coronavirus pandemic. However, we believe much of the positive sentiment surrounding consumer-packaged goods stocks is already reflected in valuations within the space. Moreover, we are wary of tough comps going into 2021 coming off of coronavirus highs.

Industrials and Business Services

We like several names in this sector, where we invest in companies that reach many different end markets and have solid business models and/or an ability to generate strong cash flows.

  • We purchased shares of Caterpillar, a leading manufacturer of construction and mining equipment as well as engines and turbines. In our view, bottoming fundamentals for Caterpillar and the broader industry created an attractive entry point. We are optimistic about the likelihood of a postelection infrastructure spending bill, regardless of the election outcome. Longer term, we are bullish on new management's strategy to shift toward a more value-added mix of products and services.
  • Cummins manufactures engines and components for commercial vehicles, off-highway equipment, and power generation units. We are optimistic about improving industry fundamentals and believe the stock should benefit from a good cyclical setup. Additionally, we like the company's strong management team, well-known brand, robust distribution network, and continued investment in both diesel and alternative powertrains.
  • Shares of UPS soared as stronger-than-expected consumer demand powered the company to a significant quarterly earnings beat. Given the impressive earnings results, we are optimistic that the company's efforts to address the profitability of its domestic package business and revamp its pricing program are paying off. We sold shares on strength.

Real Estate

Within the sector, we typically hold real estate investment trusts (REITs), which own and frequently operate many different types of income-producing real estate properties. We value the attractive dividend yields that REITs tend to provide.

  • We bought shares of Welltower, a real estate investment trust that invests in senior housing, post-acute care providers, and health systems. In our view, the market is inaccurately discounting Welltower's defensive characteristics and stabilizing fundamentals within senior housing and skilled nursing facilities. We also believe the stock is attractively valued given what we expect will be a long-term step-up in demand for senior housing.

Utilities

The utilities sector contains several companies that deliver durable cash flows and higher dividend yields. Despite the sector's poor relative performance during the initial phase of the coronavirus sell-off, we are attracted to the durability of utility earnings, and we believe efforts to modernize the U.S. electric grid while shifting more power production to renewables offers a multiyear rate-base growth opportunity. We sold shares during the quarter.

  • We pared the portfolio's exposure to CenterPoint Energy throughout the quarter before eliminating the position in September on reduced risk/reward as we believe that the range of outcomes has widened amid the coronavirus pandemic and are concerned about ongoing C-suite turnover.

Sectors

Total
Sectors
11
Largest Sector Financials 21.45% Was (30-Nov-2020) 21.39%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: Russell 1000 Value Index

Top Contributor^

Financials
Net Contribution 1.46%
Sector
0.18%
Selection 1.28%

Top Detractor^

Energy
Net Contribution -0.16%
Sector
0.23%
Selection
-0.40%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Information Technology
By2.98%
Fund 12.64%
Indicative Benchmark 9.66%

Largest Underweight

Communication Services
By-5.38%
Fund 4.26%
Indicative Benchmark 9.64%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Heather McPherson, Portfolio Manager,
Financials represent a significant absolute weighting in the portfolio. We tend to prefer defensively positioned companies with solid balance sheets and diversified revenue streams, as we are mindful of the adverse impact of lower interest rates on bank lending margins and potential weakening of the credit cycle. In December, we sold shares of certain companies to manage our position size. We also bought certain names to take advantage of attractive investment opportunities.

Team (As of 15-Jan-2021)

John D.  Linehan, CFA

John D. Linehan is the portfolio manager for the U.S. Large Cap Equity Income Strategy, U.S. Select Value Strategy and co-portfolio manager for the US Large-Cap Value Equity Strategy in the U.S. Equity Division. In addition, he is the chief investment officer of Equity and a member of the firm's U.S. Equity Steering and Equity Brokerage and Trading Control Committees. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

John’s investment experience began in 1987, and he has been with T. Rowe Price since 1998, beginning as an investment analyst, covering paper and forest products and the airline industry, in the U.S. Equity Division. From 2003 to 2009, he was the portfolio manager of the US Value Strategy, and from 2009 to 2014, he was head of U.S. Equity and chairman of the U.S. Equity Steering Committee. Prior to T. Rowe Price, John was an executive in the oil trading and consulting industry, first as vice president and managing director for Delaney Petroleum, then as vice president and managing director for E.T. Petroleum. He also was an associate in mortgage-backed securities trading at Banker Trust NY.

John earned a B.A. in economics from Amherst College and an M.B.A. from Stanford Graduate School of Business, where he was the Henry Ford II Scholar, an Arjay Miller Scholar, and the winner of the Alexander A. Robichek Award in finance. John also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2002
  • Years at
    T. Rowe Price
    22
  • Years investment
    experience
    31
Mark S.  Finn, CFA, CPA

?Mark Finn is the portfolio manager of the US Large-Cap Value Equity Strategy, which includes the Value Fund, and co-portfolio manager of the Large-Cap Value Fund in the U.S. Equity Division. He is chairman of the Investment Advisory Committee of the U.S. Large Cap Value Equity Strategy. Mark is also a vice president and an Investment Advisory Committee member of the US Large-Cap Equity Income, Global Natural Resources Equity, US Quantitative U.S., US Quantitative Large, US Mid-Cap Value Equity, and Retirement Strategies.

Mark’s investment experience began in 1998, and he has been with T. Rowe Price since 1990, beginning as controller of Investment Services in the Finance department. After that, he was principal accounting officer for the firm’s realty income strategies and an equity research analyst. Prior to T. Rowe Price, Mark was employed by Price Waterhouse LLP as an auditor, working on engagements for both public and private companies.  

Mark earned a B.S. in accounting from the University of Delaware. He also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2010
  • Years at
    T. Rowe Price
    30
  • Years investment
    experience
    23
Heather K. McPherson

Heather McPherson is a co-portfolio manager for the US Large-Cap Value Equity Strategy and an associate portfolio manager for the US Large-Cap Equity Income Strategy in the U.S. Equity Division. Heather is a member of the firm's U.S. Equity Steering Committee and is a vice president and an Investment Advisory Committee member of the US Large-Cap Equity Income, US Large-Cap Core Equity, US Quantitative Large, Global Natural Resources Equity, US Mid-Cap Value Equity, and US Large-Cap Value Equity Strategies. She is a trustee of the T. Rowe Price Foundation. Heather also is a vice president of T. Rowe Price Group, Inc. 

Heather’s investment experience began in 2001, and she has been with T. Rowe Price since 2002, beginning in the U.S. Equity Division. Prior to this, Heather was employed by Salomon Smith Barney as a summer intern, covering the storage area networking industry. Heather also was employed by Putnam Lovell Securities, Inc., as a vice president of finance and administration.

Heather earned a B.S. in managerial economics from the University of California, Davis, and an M.B.A. from Duke University, The Fuqua School of Business.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    18
  • Years investment
    experience
    20
Caleb N. Fritz, CFA

Caleb Fritz is a portfolio specialist in the U.S. Equity Division. He acts as a proxy for equity portfolio managers with institutional clients, consultants, and prospects and supports the large-cap value strategies. Caleb also is a vice president of T. Rowe Price Group, Inc.

Caleb’s investment experience began in 2000. He was with T. Rowe Price from 2000 to 2003, beginning in the Participant Service Center, and returned in 2010 until the present. Prior to his current position, he was a lead portfolio analyst providing analytical support to investment, client service, and marketing staff for the firm’s large-cap value and health sciences portfolios. Prior to returning to the firm, Caleb was employed by Legg Mason Capital Management as an associate analyst covering the health care sector.  

Caleb earned a B.A. and an M.A. from the University of South Florida. He also has earned the Chartered Financial Analyst® designation.

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

  • Years at
    T. Rowe Price
    13
  • 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 1.61%
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.