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Continental European Equity Fund

Style-agnostic, quality-driven European equity investment.

ISIN LU0938199691 Bloomberg TRPEXQA: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 24-May-2013

Performance figures calculated in GBP

Other Literature

31-Aug-2019 - Dean Tenerelli, Portfolio Manager,
Although the European equity market has rallied strongly this year, trading has been more volatile. The overall gains masked bouts of shifting sentiment and direction caused by uncertainty surrounding trade, economic fundamentals, and central bank intentions. Investor concerns around these issues remain elevated, hence we expect further volatility may be in store. While valuations are near their historical averages after the market rally at the start of the year, we are still finding a wider range of investments.
Dean Tenerelli
Dean Tenerelli, Portfolio Manager

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

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Manager's Outlook

European markets are likely to be more volatile in 2019 than last year, given the removal of economic stimulus, slowing growth, and geopolitical risks. Economic fundamentals generally may be deteriorating, and the outlook has become cloudier.

Apart from the slowing economy, investor concerns also embrace specific countries, such as China and Mexico; worsening trade relations between the world's three largest blocs, which are affecting the automotive, technology, mining, and banking industries in particular; Italy's strained relationship with the European Union; and the tortuous Brexit process.

Doubts On Earnings Growth

The first-quarter corporate results season cemented expectations of modest earnings growth over the next 12 months, although whether this can be sustained given the gloomier outlook is now open to question. We are still finding a wider range of investments, even though valuations are near their historical averages after the market rally at the start of the year.

We welcome the more volatile market and greater dispersion of returns because this gives us more relative opportunities to exploit. For example, certain industries-such as semiconductors and automotives-have been especially penalized by investors, and selective investments are emerging there. However, we would caution against expecting a rapid recovery in their fortunes in general.

We continue, however, to seek a broad spread of exposures, so that even if a more positive economic scenario unfolds, then the portfolio should display a good degree of resilience.

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 Europe (excluding the UK).

Investment Approach

  • Fundamental research is critical to successfully identify and assess long-term investment opportunities. We look for companies with high returns on capital and capable of providing sustainable earnings across the market cycle.
  • Style agnostic, focus on quality. By avoiding style constraints, we can invest in quality companies and maintain a balanced portfolio through market cycles.
  • Disciplined approach to valuation. We aim to buy businesses at a clear discount to their intrinsic value.
  • Risk management is essential and is assisted by diversification, quantitative analysis, and automatic stabilizers built in to our investment process.

Portfolio Construction

  • Typically 40-70 stocks
  • Individual position size up to 4.0% relative to the indicative benchmark
  • Sector ranges: typically +/- 10% relative to the indicative benchmark
  • Country ranges: typically +/- 10% relative to the indicative benchmark
  • Expected Tracking Error: typically 3.0% to 6.0%
  • Information Ratio objective: >0.5
  • Cash target range: fully invested, typically less than 5.0%
  • Turnover range: 40%-100%

Performance (Class Q | GBP)

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Fund % 6.69% 10.99% 10.58% 10.17%
Indicative Benchmark % 3.79% 9.40% 8.63% 8.15%
Excess Return % 2.90% 1.59% 1.95% 2.02%

Inception Date 24-May-2013

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Data as of  31-Aug-2019

  1 YR 3 YR
5 YR
Since Inception
Fund % 10.32% 13.51% 9.76% 10.29%
Indicative Benchmark % 7.07% 11.80% 8.14% 8.30%
Excess Return % 3.25% 1.71% 1.62% 1.99%

Inception Date 24-May-2013

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Data as of  30-Jun-2019

Performance figures calculated in GBP

Recent Performance

  Month to DateData as of 13-Sep-2019 Quarter to DateData as of 13-Sep-2019 Year to DateData as of 13-Sep-2019 1 MonthData as of 31-Aug-2019 3 MonthsData as of 31-Aug-2019
Fund % 0.54% 1.49% 21.62% -0.54% 8.07%
Indicative Benchmark % 1.35% 1.88% 18.90% -1.29% 6.91%
Excess Return % -0.81% -0.39% 2.72% 0.75% 1.16%

Inception Date 24-May-2013

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Indicative Benchmark: FTSE Developed Europe ex United Kingdom Index Net

Performance figures calculated in GBP

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 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-Aug-2019 - Dean Tenerelli, Portfolio Manager,
The FTSE All-World Developed Europe x UK Index weakened in August in volatile trade as fears the global economy was heading for recession intensified due to an escalation in trade tensions between the U.S. and China. Political instability in Italy and a hardening in the UK government’s Brexit stance added to the uncertainty. In the fund, the industrials and business services, consumer discretionary and communication services sectors performed best in relative terms due to positive stock picking. Italy-based Prysmian, the world’s largest global telecommunications cable manufacturer, was the top-performing holding in the industrials and business services sector. Prysmian rebounded after profit taking following a strong run. However, our underweight allocation to consumer staples, which exceeded positive stock selection in the sector, was the main curb on returns. Health care, the next worst performer, was undermined by our choice of securities. Within the latter, our off-benchmark holding in Getinge, a Swedish medical technology company, underperformed modestly amid profit-taking after the strong run in the shares this year. We believe management is turning the company around successfully and that Getinge is on the brink of demonstrating its true potential.


Largest Holding Roche Holding 5.76% Was (31-Mar-2019) 6.24%
Other View Full Holdings Quarterly data as of 30-Jun-2019
Top 10 Holdings 34.05% View Top 10 Holdings Monthly data as of 31-Aug-2019

Largest Top Contributor^

By 1.21%
% of fund 4.39%

Largest Top Detractor^

Dassault Aviation
By -0.20%
% of fund 2.06%


Quarterly Data as of 30-Jun-2019

Top Purchase

EssilorLuxottica (N)
Was (31-Mar-2019) 0.00%

Top Sale

BNP Paribas
Was (31-Mar-2019) 2.83%

Quarterly Data as of 30-Jun-2019

30-Jun-2019 - Dean Tenerelli, Portfolio Manager,

Opportunities Emerged in Volatile Quarter

We added a mix of high-quality defensive and cyclical names with durable earnings and strong balance sheets that became more attractively valued in the volatile market conditions during the quarter. The strategy reduced exposure to industrial stocks, which were affected by the trade dispute between the U.S. and China; to banks, which may suffer if central banks loosen monetary policy due to a loss of economic momentum; and to consumer staples, for stock-specific reasons. We continue to seek a relatively balanced portfolio in terms of exposures to possible economic scenarios, so that our relative performance is not dependent on a particular "macro" environment.

Raised Consumer Discretionary Overweight

We raised an overweight position in consumer discretionary. We sold our holding in Plastic Omnium, a France-based manufacturer of bumpers, fuel tanks and systems, and waste-container solutions, to recycle funds into more profitable opportunities. We made a sizable investment in EssilorLuxottica, the world's leading eyewear company, at a very attractive valuation. We also bought shares in Husqvarna, a Sweden-based company that develops, manufactures, and markets outdoor power products, consumer watering products, cutting equipment, and diamond tools for the construction and stone industries. In our view, the company's turnaround efforts are beginning to bear fruit.

  • We still own shares in auto components company Autoliv, a best-in-class supplier of automotive safety systems, and Daimler, a leading global manufacturer of premium automobiles and trucks. Other consumer discretionary holdings include Zalando, Europe's largest online retailer, and SEB, a France-based household equipment manufacturer.
  • We exited Plastic Omnium, a supplier of plastic bumpers to the automotive industry on the view that slower global economic growth will lead to a reduction in demand for vehicles. Management is now guiding for an operating profit decline in the first half.
  • We opened a position in EssilorLuxottica. The company benefits from structural growth in developed markets and has significant expansion potential in emerging markets. The return on capital employed is significant and should improve further as merger synergies are realized.

Raised Overweight in Health Care

We raised our overweight allocation to health care, investing in Grifols, a Spain-based company engaged in the manufacture of biopharmaceuticals. Otherwise, the sector is benefiting from defensive qualities amid the current market uncertainty. We hold Getinge, an off-benchmark Swedish medical tech company with product areas including surgery, intensive care, infection control, and patient handling. We also own sizable positions in pharmaceuticals, with overweights in two Swiss companies, Roche Holding and Novartis.

  • We initiated a position in Grifols, a Spain-based company engaged in the manufacture of biopharmaceuticals, at an attractive valuation. Grifols is one of the top three makers of plasma-derived proteins, with a 20% global market share, and has leading positions in several key products. The bioscience division is poised to deliver strong sales growth thanks to the resumption of sales of albumin to China and a strategic alliance with Shanghai RAAS, giving it a larger presence in the fast-expanding Chinese market.

Raised Overweight in Utilities

We raised our overweigh exposure to utilities, our largest allocation, investing in E.ON, a German energy business. The sector is benefiting as a haven from market volatility. We are overweight in the gas industry, where we hold Italgas, Italy's largest natural gas distributor. We are also overweight in the electric utilities industry, with investments in two Spanish companies: Red Electrica, a partly state-owned and public limited corporation that operates Spain's national electricity grid, and Iberdrola, an integrated utility with a presence in the decarbonized renewables and electricity transmission markets. And we are overweight in multi-utilities, owning shares in E.ON and Hera, an Italy-based public company operating in the waste, water, energy, and environmental spheres.

  • We opened a position in E.ON, an energy utility with operations in Germany, Sweden, Eastern Europe and Turkey. The business benefits from strong management and offers a steady income stream. E. ON is expanding its market share after a swap of Innogy assets with RWE and expects to boost earnings from synergies in its energy networks and retail business.

Pared Underweight in IT

We reduced our underweight exposure to information technology (IT). We first exited our position in Simcorp, a provider of software for the fund management industry, after a prolonged period of outperformance. Valuations in IT were generally overextended at the start of the quarter, but opportunities then arose in the subsequent market weakness, enabling us to reopen a position in Wirecard, a global online payments processor, and to invest in Capgemini, a leading global management consulting, outsourcing, and professional services company.

  • We were attracted once more to Wirecard after an independent legal probe found no basis to allegations made by a whistleblower and the accountants signed off the 2018 results without any reservations. Wirecard's organic growth rate is consistently around 20%, and exploitation of digital opportunities is likely to sustain the company's strong expansion. The company also unveiled a strategic partnership with Softbank, which becomes an anchor shareholder.
  • Capgemini is benefiting from the digitalization of traditional industry and the shift towards greater outsourcing in Europe. The proposed acquisition of Altran, a leader in engineering research and development services, should allow Capgemini to expand in adjacent areas and augment its digital manufacturing services appeal to industrial clients.��

Deepened Underweight in Financials

We further reduced our exposure to financials, one of our largest underweights, which may struggle as the economy loses momentum and the European Central Bank extends its loose monetary policy. After selling several bank holdings in the previous quarter, we trimmed our investment in France's BNP Paribas to raise funds for opportunities elsewhere.

The banks we still hold are solid, liquid, well managed, and with strong local franchises. In addition to BNP Paribas, we own KBC, a leading Belgian bancassurer and financial company with a strong position in central and Eastern Europe, and Erste Group Bank, one of the largest banks in Austria and central Europe. We also like financial services groups like UBS, which offers solid compounded growth and strong free cash flow after refocusing the business mix along more profitable lines. However, we have maintained our overweight allocation to insurance companies with a global reach. Switzerland-based Zurich Insurance remains our largest position, and we hold Germany-based Allianz.�

Industrials and Business Services: Remained Underweight

We maintained an underweight position in industrials and business services as the European economy lost momentum and the market rally faltered. We took profits in two of our holdings that performed well in the market rally this year, Schneider Electric, a global specialist in energy management and automation, and Konecranes, a Finland-based industrial cranes manufacturer, which are both sensitive to cyclical swings in the market.

In terms of industry, our largest weight is electrical equipment. Schneider Electric is still our largest holding, followed by Prysmian, a leading global cable manufacturer. Our next largest overweight industry is aerospace and defense, where we hold Dassault Aviation and Thales. We have modest overweight allocations to machinery and professional services as well. In the former, apart from Konecranes, we hold Epiroc, a leading provider of products, solutions, and services to the global mining and infrastructure markets, and Germany-based Gea Group. In the latter, we own shares in RELX, the world's leading publisher of science journals and a provider of risk assessments on transactions with retail customers.


Largest Sector Health Care 15.20% Was (31-Jul-2019) 15.51%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: FTSE All World Developed Europe ex United Kingdom Index

Top Contributor^

Health Care
Net Contribution 0.64%
Selection 0.63%

Top Detractor^

Information Technology
Net Contribution -0.09%


Quarterly Data as of 30-Jun-2019

Largest Overweight

Communication Services
Fund 8.56%
Indicative Benchmark 4.71%

Largest Underweight

Consumer Staples
Fund 6.21%
Indicative Benchmark 14.19%

Monthly Data as of 31-Aug-2019

31-Aug-2019 - Dean Tenerelli, Portfolio Manager,
We raised our allocation to industrial and business services, maintaining a balanced portfolio with the aim of benefiting from any move higher in the index. For instance, we added a Scandinavian engineering company that we believe will perform resiliently in this late stage of the economic cycle. We adjusted our financials holdings, moving further underweight by selling UBS, a Swiss company with investment banking, wealth and asset management businesses. However, we opened an investment in a highly profitable Nordic insurer.


Largest Country France 21.27% Was (31-Jul-2019) 21.12%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2019

Indicative Benchmark: FTSE All World Developed Europe ex United Kingdom Index

Top Contributor^

Net Contribution 0.82%
Selection 0.83%

Top Detractor^

Net Contribution -0.33%


Quarterly Data as of 30-Jun-2019

Largest Overweight

Fund 11.29%
Indicative Benchmark 6.33%

Largest Underweight

Fund 11.63%
Indicative Benchmark 18.71%

Monthly Data as of 31-Aug-2019

30-Sep-2018 - Dean Tenerelli, Portfolio Manager,
The new position in the aforesaid Belgian bank reduced our underweight allocation to the country. We also increased our overweight in Switzerland. Otherwise, our country weights were little changed. Our country positioning is a function of our bottom-up stock picking.

Team (As of 31-Aug-2019)

Dean Tenerelli

Dean Tenerelli is portfolio manager in the Equity Division at T. Rowe Price. He manages the Europe Equity Strategy, a position he has held since October 2005, and is chairman of its Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Tenerelli has 26 years of investment experience, 17 of which have been at T. Rowe Price. He joined the firm in 2000 as an equity research analyst and was appointed co-manager of the firm's Global Equity Strategy in 2004. Prior to joining T. Rowe Price, Mr. Tenerelli served as a director for Credit Suisse Asset Management, where he was a senior telecommunications analyst. Prior to Credit Suisse Asset Management, Mr. Tenerelli worked as assistant portfolio manager at Artisan Partners (1995-2000). He began his investment career in 1993 at Banesto Bolsa in Madrid as an equity analyst following Spanish equities. Mr. Tenerelli later became an international equity analyst, focused on Europe, for Waddell and Reed in Kansas City, MO. In 1995, he moved to Artisan Partners as an assistant portfolio manager.

A graduate of Rutgers University with a B.A. in economics, Mr. Tenerelli earned an M.B.A. from Escuela Superior de Administracion y Direccion de Empresa and an M.A. in international management from American Graduate School of International Management (Thunderbird).

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Andrew Clifton

Andrew Clifton is a portfolio specialist in the Equity Division at T. Rowe Price. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Clifton has over 29 years of investment experience, eight of which have been at T. Rowe Price. Prior to joining the firm in 2010, he was an executive director at UBS Global Asset Management. Prior to that, he was a vice president at Merrill Lynch.

Mr. Clifton earned a B.Sc. in economics from the London School of Economics and an M.Sc. in econometrics from the University of Southampton.

  • Years at
    T. Rowe Price
  • Years investment

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class I €2,500,000 €100,000 €0 0.00% 65 basis points 0.75%
Class Q €15,000 €100 €100 0.00% 65 basis points 0.82%

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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