SICAV
US Smaller Companies Equity Fund
Seeks capital appreciation using both value and growth approaches.
3YR Return Annualised
(View Total Returns)
Total Assets
(USD)
1YR Return
(View Total Returns)
Manager Tenure
Information Ratio
(5 Years)
Tracking Error
(5 Years)
Inception Date 31-Jul-2001
Performance figures calculated in USD
Strategy
Markets rebounded sharply from their first-quarter decline fueled by optimism that the coronavirus was beginning to subside and by historic fiscal and monetary stimulus. All indices produced impressive returns in the period, but small-cap stocks edged large-caps in the quarter, and growth continued its dominance over value. Of the Russell headline indices, only the Russell Microcap Index outpaced our benchmark, the Russell 2500. During the quarter, the Russell 2500 Net 30% Index returned 26.43%, with every sector posting positive returns and technology, health care, and consumer discretionary being the largest contributors.
�
The market's vigorous gains were driven by the Federal Reserve's and federal government's massive stimulus efforts, as well as slowing coronavirus infection rates in the U.S. and various other countries, which encouraged leaders to gradually lift lockdowns and reopen their economies. While U.S. economic data were often dismal, some better-than-expected readings later in the quarter boosted investor sentiment. However, as the quarter ended, investors were somewhat concerned about increasing coronavirus cases in a number of states, which prompted some governors to stop or reverse some of their reopening efforts. As we get closer to November's election, political uncertainty will also weigh on stocks.
�
The US Smaller Companies Equity strategy seeks to capitalize on opportunities across the broad range of the small-cap and mid-cap U.S. equity market. The portfolio has a collection of core holdings in high-quality companies we expect to compound value over time and looks for select investments in "deeper value" opportunities; companies experiencing challenge or controversy of one sort or another that the investment team believes can be resolved in a reasonable period of time. The portfolio holds a number of income-oriented, dividend growth companies, as well as a collection of high-growth investments in which the investment team believes other investors do not yet fully appreciate the companies' long-term growth potential.�Overall, the strategy remains modestly overweight the high-quality compounding companies, but has been finding opportunities in consumer discretionary, materials, health care and energy.
�
Since the strategy's inception over 15 years ago, it has relied upon T. Rowe Price's team of fundamental research analysts to provide unique perspective and insight on the companies they follow. Going forward, the portfolio manager will continue to work closely with this talented team of investment professionals to identify the most attractive opportunities across the full range of the small-cap and mid-cap segment of the U.S. equity market.
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 from smaller capitalization companies in the United States.Investment Approach
- Focus on companies within the market cap range of the Russell 2500 Index at time of purchase.
- Assess valuation using relevant sector/industry metrics — absolute and relative price to earnings, price to cash flow, and price to assets.
- Integrate fundamental research by a dedicated Small-Cap research team to discover underfollowed companies possessing clear business plans, financial flexibility, and proven management teams.
- Identification of a “value creation” catalyst is key.
- Broadly diversify holdings to manage portfolio risk profile.
- Employ a low turnover and patient trading strategy to promote full value realization.
Portfolio Construction
- 200-250 securities
- Position sizes typically range from 0.15% to 2.50%
- Primary sector weights generally vary from 0.5X to 2.0X the Russell 2500 Index weights
Performance (Class A)
Annualised Performance
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
Since Manager Inception Annualised |
|
|---|---|---|---|---|---|
| Fund % | 14.35% | 14.06% | 13.21% | 15.24% | 15.39% |
| Indicative Benchmark % | 6.29% | 6.45% | 8.05% | 11.83% | 4.16% |
| Excess Return % | 8.06% | 7.61% | 5.16% | 3.41% | 11.23% |
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
|
|---|---|---|---|---|
| Fund % | 5.35% | 10.52% | 9.84% | 13.88% |
| Indicative Benchmark % | -5.16% | 3.60% | 4.93% | 10.98% |
| Excess Return % | 10.51% | 6.92% | 4.91% | 2.90% |
Recent Performance
| Month to DateData as of 24-Sep-2020 | Quarter to DateData as of 24-Sep-2020 | Year to DateData as of 24-Sep-2020 | 1 MonthData as of 31-Aug-2020 | 3 MonthsData as of 31-Aug-2020 | |
|---|---|---|---|---|---|
| Fund % | -5.73% | 3.64% | 0.51% | 2.79% | 11.14% |
| Indicative Benchmark % | -6.06% | 2.05% | -9.44% | 4.49% | 11.72% |
| Excess Return % | 0.33% | 1.59% | 9.95% | -1.70% | -0.58% |
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.
Holdings
Total
Holdings
176
Largest Top Contributor^
Quidel
By 0.42%Largest Top Detractor^
JBG SMITH Properties
By -0.02%Top Purchase
CareDx (N)
0.43%Top Sale
Cable One
0.86%
Sectors
Total
Sectors
11
Top Contributor^
Information Technology
Net Contribution 1.27%Top Detractor^
Consumer Discretionary
Net Contribution -0.97%Largest Overweight
Industrials & Business Services
Largest Underweight
Financials
Team (As of 05-Aug-2020)
Curt Organt is the portfolio manager of the US Smaller Companies Equity Strategy and an associate portfolio manager of the US Small-Cap Core Equity Strategy in the U.S. Equity Division. Curt is a vice president and an Investment Advisory Committee member of the US Small-Cap Core Equity, US Diversified Small-Cap Value Equity, and US Small-Cap Growth Equity Strategies. He also is a vice president of T. Rowe Price Group, Inc.
Curt’s investment experience began in 1993, and he has been with T. Rowe Price since 1995, beginning in the U.S. Equity Division. Prior to this, Curt was employed by DAP Products, Inc., as a financial and marketing analyst.
Curt earned a B.S. in finance and philosophy from LaSalle University and an M.B.A. from Wake Forest University. Curt also has earned the Chartered Financial Analyst® designation.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
- Fund manager2019
since - Years at24
T. Rowe Price - Years investment28
experience
Eric Papesh is a portfolio specialist in the U.S. Equity Division of T. Rowe Price. He is based in London and serves as a proxy for equity portfolio managers with institutional clients, consultants and prospects. Mr. Papesh supports T. Rowe Price's US Smaller Companies Equity and US Large-Cap Equity Strategies offered in the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.
Mr. Papesh has 22 years of financial services experience, two of which have been with T. Rowe Price. Before joining the firm in 2014, he was a senior research analyst with Russell Investments, where he focused on US equity investment strategies.
Mr. Papesh earned a B.A. in business administration and an M.B.A. from the University of Washington. He has also earned the Chartered Financial Analyst designation.
- Years at5
T. Rowe Price - Years investment25
experience
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% | 160 basis points | 1.68% |
| Class I | $2,500,000 | $100,000 | $0 | 0.00% | 95 basis points | 0.99% |
| Class Q | $1,000 | $100 | $100 | 0.00% | 95 basis points | 1.04% |
| Class S | $10,000,000 | $0 | $0 | 0.00% | 0 basis points | 0.04% |
Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.
Curt Organt is the portfolio manager of the US Smaller Companies Equity Strategy and an associate portfolio manager of the US Small-Cap Core Equity Strategy in the U.S. Equity Division. Curt is a vice president and an Investment Advisory Committee member of the US Small-Cap Core Equity, US Diversified Small-Cap Value Equity, and US Small-Cap Growth Equity Strategies. He also is a vice president of T. Rowe Price Group, Inc.