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Asian ex-Japan Equity Fund

A diversified fund, with a focus on sustainable growth.

ISIN LU0860350064 Bloomberg TRPAXJQ:LX

3YR Return Annualised
(View Total Returns)

Total Assets


1YR Return
(View Total Returns)

Manager Tenure


Information Ratio
(5 Years)

Tracking Error
(5 Years)


Inception Date 31-Jan-2013

Performance figures calculated in USD

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31-Jan-2020 - Anh Lu, Portfolio Manager,
We remain constructive on the long-term outlook for Asia ex-Japan equities. The recent turmoil from the coronavirus has created a short-term opportunity; however, market volatility will likely persist until we see clear signs that the outbreak is coming under control. China’s growth in the near term will likely be slower than expected and spill over to other economies. We expect Asian governments will roll out policies to help alleviate the impact of the coronavirus.
Anh Lu
Anh Lu, Portfolio Manager

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

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Manager's Outlook

We remain constructive on the long-term outlook for Asia ex-Japan equities, backed by the broad stability in the region's economies and policy support from several major central banks. Valuations in Asia ex-Japan appear broadly reasonable relative to long-term history and developed markets.

We believe the worst of the earnings downgrades is over although in the near term, upward revisions of earnings expectations may be muted, particularly in the absence of a comprehensive resolution to the trade discord between the U.S. and China. We have seen some upward earnings revisions in the technology sector and in select consumer staples names in China and India.

We continue to monitor the trade-related developments between the U.S. and China; we believe it will take time to fully resolve the material issues between the two countries, particularly those involving technology. We believe that China will continue to experience a gradual slowdown in economic growth due to financial deleveraging and import tariffs. However, China's focus on encouraging companies to move up the value chain and the shift in its growth model towards domestic consumption may partially counteract the negative impact of higher tariffs.

China will likely continue to encourage innovation in many areas of technology. We see opportunities in businesses that continue to innovate and utilize technology in order to enhance their competitive standing.

Our long-term case for investing in China holds. We think China will continue to transition its economy with care, aiming to balance growth stabilization with financial deleveraging. China's contribution to the global economy remains significant, and its growth continues to surpass that of most other countries.

With regard to India, the economy remains under pressure as we see no signs of a revival in rural consumption growth. However, inventories have come down, giving us some optimism that demand may pick up, averting a prolonged deceleration. The improvement in India's current account is also a positive development.

While we welcome the government's efforts to support growth such as monetary easing, recapitalization of public sector banks, and the creation of a real estate distressed fund, execution of these measures will be key. Against this backdrop, we continue to maintain our preference for good-quality Indian businesses that continue to gain market share and compound earnings.��

Outside of China and India, developing Asian countries continue to boast among the world's fastest economic and demographic growth. Policymakers are working to reduce reliance on export-led growth, increase foreign exchange reserves, and improve the transparency of their capital markets. Fundamentals for individual countries and companies across the region have steadily improved over the past decade and we continue to search for the best growth ideas in Asia ex-Japan with our bottom-up investment approach.

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 companies in Asia (excluding Japan).

Investment Approach

  • Employ fundamental analysis to identify companies with sustainable above-market earnings growth rates.
  • Focus on franchise strength, management team quality, free cash flow, and financing/balance sheet structure.
  • Verify relative valuation appeal versus both local market and region.
  • Apply negative screening for macroeconomic and political factors to temper bottom-up enthusiasm for specific securities.

Portfolio Construction

  • 80-120 stock portfolio
  • Individual positions typically range from 0.40% to 5.00% - average position size of 1.00%
  • Country and sector weightings a residual of stock selection. Significant deviations expected.
  • Reserves range from 0% to 10%, but typically less than 5%

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Fund % 11.83% 10.70% 6.25% 5.41%
Indicative Benchmark % 5.22% 8.86% 5.06% 4.86%
Excess Return % 6.61% 1.84% 1.19% 0.55%

Inception Date 31-Jan-2013

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  31-Jan-2020

  1 YR 3 YR
5 YR
Since Inception
Fund % 26.69% 15.11% 7.64% 6.23%
Indicative Benchmark % 18.17% 12.77% 6.55% 5.62%
Excess Return % 8.52% 2.34% 1.09% 0.61%

Inception Date 31-Jan-2013

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  31-Dec-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 24-Feb-2020 Quarter to DateData as of 24-Feb-2020 Year to DateData as of 24-Feb-2020 1 MonthData as of 31-Jan-2020 3 MonthsData as of 31-Jan-2020
Fund % 1.11% -3.75% -3.75% -4.81% 1.90%
Indicative Benchmark % 0.16% -4.29% -4.29% -4.45% 2.16%
Excess Return % 0.95% 0.54% 0.54% -0.36% -0.26%

Inception Date 31-Jan-2013

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Indicative Benchmark: MSCI All Country Asia ex Japan Index 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.

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-Jan-2020 - Anh Lu, Portfolio Manager,
Asia ex-Japan equities fell in January as the spread of a novel coronavirus intensified fears about its economic implications. These worries reversed gains from the U.S.-China interim trade pact forged in the middle of the holiday-shortened month. Within the portfolio, stock selection in India, notably Shriram Transport, hampered portfolio performance due to reports about the nonbank financial company’s merger with its parent and the latter’s insurance arm. We like Shriram’s unique franchise as it operates in a segment where banks are not able to compete in and it has been more prudent in lending versus rivals. Stock selection in consumer staples hurt relative returns further. China Resources Beer weighed on performance as Chinese equities were broadly sold down amid concerns brought about by the coronavirus outbreak. In contrast, stock selection in South Korea boosted performance the most. Samsung Electronics helped as the stock outperformed following its consensus-beating operating profit in the fourth quarter of 2019. Stock choices in financials also lifted returns, particularly our lack of exposure to large Chinese banks and our position in Kotak Mahindra Bank (KMB). Shares of KMB reacted positively to the Indian bank’s latest quarterly results that showed stable operating profitability and asset quality.


Largest Holding Tencent Holdings 7.57% Was (30-Sep-2019) 6.80%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 44.93% View Top 10 Holdings Monthly data as of 31-Jan-2020

Largest Top Contributor^

Samsung Electronics
By 0.14%
% of fund 8.17%

Largest Top Detractor^

HKT Trust & HKT Limited
By -0.33%
% of fund 1.82%


Quarterly Data as of 31-Dec-2019

Top Purchase

Alibaba Group Holding
Was (30-Sep-2019) 6.06%

Top Sale

Was (30-Sep-2019) 1.77%

Quarterly Data as of 31-Dec-2019

31-Dec-2019 - Anh Lu, Portfolio Manager,

During the quarter, we identified opportunities in names with decent growth potential which we believe have attractive risk/reward profiles. We sold shares of certain companies in the light of stock specific developments and found more compelling investment ideas elsewhere. China remained our largest country position while from a sector perspective, consumer staples was our biggest relative overweight.

We prefer companies that are gaining market share and those that will benefit from pricing changes and industry consolidation. We also favor companies that are putting in place improvements by making optimal use of technology in their business. We continue to like underappreciated manufacturing businesses with a long track record of execution, strong cash flow and a high dividend yield. We see value in companies with improving fundamentals due to capital expenditure discipline.

In Greater China, we continued to own companies that we think are best placed to benefit from import substitution in areas such as industrials, technology, and consumer products. The lack of a comprehensive solution to the U.S.-China trade discord can be expected to result in Chinese companies substituting U.S. imports with locally-produced goods besides imports from other countries.

We Increased Our Allocation to China; Focus on Consumer Discretionary Names

In China, we found opportunities in a few cyclical stocks with good growth prospects and undemanding valuations. We added companies that are turning around their businesses, enhancing efficiency with the use of technology, and improving corporate governance. We seek companies that we believe can grow market share and compound earnings despite the macroeconomic and trade policy uncertainties.

We increased exposure to businesses with strong online platforms that we believe can continue to expand, such as Tencent Holdings. While these businesses may be approaching a more mature stage of development, investors may be underestimating their ability to grow earnings.

  • We established a new position in Yum China, a fast-food chain operator, that offers decent growth potential, strong cash generation, and which uses technology to help streamline its business.
  • We also started a position in Gree Electric Appliance, the largest air conditioner manufacturer in China, which has an improving shareholding structure. Its state-owned parent sold part of its stake in the company to an investment fund. This state-owned enterprise reform plan will likely result in improved corporate governance, better channel efficiency, a potential rerating and further market consolidation.
  • We initiated a position in Fuyao Glass Industry, a high-quality automotive glass maker, which we believe is underearning due to the cyclical weakness of China's auto market. However, we think its margins may recover along with the market and the improving profitability of its overseas operations.
  • We participated in the Hong Kong debut of e-commerce firm Alibaba. It reported strong quarterly revenues and profit growth and we think it will likely improve profitability in the big Chinese cities going forward.

With the addition of Yum China, Alibaba, Gree Appliances and Fuyao Glass Industry, we increased further our allocation to the consumer discretionary sector in the quarter.

We Reduced Our Relative Underweight to South Korea

In South Korea, we initiated a position in LG Chemical, taking advantage of its share price decline year-to-date. We think its stock price reflects the weakness in third-quarter results and the negative revision in consensus estimates. We believe that its chemical margins are nearing a trough.

During the year, regulatory uncertainties and geopolitical concerns weighed on investor interest in South Korea and finding new bottom-up opportunities proved to be a challenge. In the region's developed markets like South Korea, Taiwan, Hong Kong and Singapore, we like companies with global or regional businesses as prospects for growth outside their home markets are better.

Allocation to India and the Philippines Decreased

In India, we kept our overweight position during the quarter and remained heavily skewed towards privately-owned financials with quality franchises. However, we pared back our exposure to certain stocks, locking in some of the year-to-date gains in Colgate-Palmolive (India), a leading provider of oral care products, and HDFC Bank, for instance.

We initiated a position in Bandhan Bank, a highly profitable microfinance franchise, which we view as a long-term compounder. The Kolkata-based company acquired GRUH Finance, a high-quality rural housing finance company, which we had bought into in the previous quarter. We do not foresee integration issues from the merger.

In the Philippines, we trimmed our allocation as we exited Manila Water Company as mentioned earlier. Aside from PLDT, we own the Bank of the Philippine Islands, part of one of the country's largest conglomerates, and Universal Robina, a high-quality snack and beverage manufacturer with exposure to other ASEAN markets such as Thailand, Vietnam and Indonesia.

We Pared Our Exposure to Financials; Added to Real Estate

From a sector perspective, financials remained our biggest position in absolute terms, but in the December quarter we turned underweight the sector in relative terms. We exited Prudential as the insurer completed the demerger of its UK fund management and insurance arm, M&G. While its Asian business is improving operationally, its U.S. business is facing structural issues that will unlikely be solved in the near term.

Aside from the abovementioned Bandhan Bank, we continued to add to Chinese insurers PICC Property and Casualty and Ping An Insurance, which we think will benefit from the use of technology in their operations.

In real estate, we reduced our relative underweight as we started a position in Sun Hung Kai, a Hong Kong property developer and commercial landlord. Its valuation appeared close to a trough, in our view, and it has a well-anchored dividend yield while operating in a market where supply is lacking. We favor real estate companies that will benefit from the consolidation of China's property market such as Shimao Property, a Hong Kong-listed Chinese homebuilder focusing on Tier 1 and Tier 2 cities. We view Shimao as a market share gainer, helped by its financing and land bank advantages compared to rivals.


Largest Sector Financials 21.44% Was (31-Dec-2019) 21.33%
Other View complete Sector Diversification

Monthly Data as of 31-Jan-2020

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor^

Information Technology
Net Contribution 0.77%
Selection 0.75%

Top Detractor^

Consumer Staples
Net Contribution -0.82%


Quarterly Data as of 31-Dec-2019

Largest Overweight

Consumer Staples
Fund 9.65%
Indicative Benchmark 5.17%

Largest Underweight

Fund 1.39%
Indicative Benchmark 4.22%

Monthly Data as of 31-Jan-2020

31-Jan-2020 - Anh Lu, Portfolio Manager,
We initiated positions in select consumer discretionary stocks, which may be affected by the spread of the coronavirus in the near term, but which are undervalued and likely to be long-term earnings or free cashflow compounders as well as market share gainers. For instance, we invested in a Chinese online travel service provider. We view its share price weakness as short term and think that the coronavirus is unlikely to affect the company’s financials in 2021. We increased our overweight to consumer discretionary. Financials remained our largest sector position as we bought into a well-run and high-quality Taiwanese leasing company.


Largest Country China 46.18% Was (31-Dec-2019) 46.76%
Other View complete Country Diversification

Monthly Data as of 31-Jan-2020

Indicative Benchmark: MSCI All Country Asia ex Japan Index (unhedged)

Top Contributor


Top Detractor


Largest Overweight

Fund 46.18%
Indicative Benchmark 40.31%

Largest Underweight

Fund 9.46%
Indicative Benchmark 13.72%

Monthly Data as of 31-Jan-2020

31-Jan-2020 - Anh Lu, Portfolio Manager,
China remained our largest country position in absolute and relative terms as a result of our move towards pro-growth cyclical companies starting in the second half of 2019. However, in January 2020 we reduced our relative overweight as we exited certain stocks where our conviction and thesis have waned. For example, we eliminated China Unicom, an integrated mobile operator whose pace of revenue recovery was slower than our initial expectations. Our thesis of Unicom being a market share gainer weakened as we do not expect much differentiation in Unicom’s 5G network service quality compared with its two other rivals.

Team (As of 06-Feb-2020)

Anh Lu

Anh Lu is a portfolio manager in the Equity Division of T. Rowe Price Hong Kong Limited. Ms. Lu is the lead portfolio manager for the Asia ex-Japan Equity Strategy. She is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

Ms. Lu has 24 years of investment experience, 18 of which have been with T. Rowe Price. Prior to joining the firm, she was a vice president of the Asia Pacific Technology Investment Banking Division of Salomon Smith Barney in Hong Kong. Before Salomon Smith Barney, Ms. Lu spent three years at LGT Asset Management as an analyst and portfolio manager.

Ms. Lu earned a B.A. with honours from the University of Western Ontario.

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Nick Beecroft

Nicholas Beecroft is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Beecroft has 18 years of investment experience, 14 of which have been with T. Rowe Price. He joined the firm in London in 2005 and spent many years working with our emerging markets equity team. Mr. Beecroft has been based in Hong Kong since 2011. Prior to joining T. Rowe Price, he was an investment analyst at Mercer Investment Consulting.

Mr. Beecroft earned a B.A, with honours, in contemporary European studies from the University of Southampton. He also has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
  • Years investment
Kanwal Masood

Kanwal Masood is a portfolio specialist in the Equity Division at T. Rowe Price, covering the Middle East and Africa Equity and Emerging Europe Equity Strategies. She is an associate vice president of T. Rowe Price International Ltd.

Ms. Masood has 10 years of investment experience, all of which have been with T. Rowe Price. She joined the firm in 2007, covering the global and regional emerging market equity strategies as a portfolio analyst. Prior to joining T. Rowe Price, she was a product specialist at the London Stock Exchange.

Ms. Masood earned a B.Sc. with honours in mathematics and computer science from King's College London.

  • Years at
    T. Rowe Price
  • Years investment

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 $15,000 $100 $100 5.00% 160 basis points 2.04%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 1.09%
Class Q $15,000 $100 $100 0.00% 75 basis points 1.17%

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

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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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