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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

European Equity Fund

Style agnostic, focus on quality to maintain a balanced portfolio.

ISIN LU0285831334 Bloomberg TRPEEQI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(EUR)

14.91%
€120.0m

1YR Return
(View Total Returns)

Manager Tenure

37.73%
1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.55
3.46%

Inception Date 26-Feb-2007

Performance figures calculated in EUR

31-Oct-2021 - Tobias Mueller, Portfolio Manager ,
Investor appetite for European assets has been rekindled this year by hopes of an economic recovery based on the speedy rollout of coronavirus vaccines. However, the notable progress we have seen so far may be less pronounced next year. The strong market move upward has pushed stock valuations to levels that are less attractive.
Tobias Mueller, CFA
Tobias Mueller, CFA, Portfolio Manager

Tobias Mueller is a regional portfolio manager for the European Select Strategy, effective October 2018, and for the Europe Equity and Europe ex-UK Equity Strategies, effective October 2020. He is a vice president of T. Rowe Price International Ltd.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Investor appetite for European assets has been rekindled this year by growing hopes of an economic recovery based on the speedy rollout of effective coronavirus vaccines. However, the notable progress we have seen so far may be less pronounced next year. The strong market move upward has pushed overall stock valuations to levels that are less attractive, especially when concerns about the fundamental economic outlook remain.

After a sharp rise in consumption fueled by pent-up demand as economies reopened there are signs that spending has begun to normalize. Companies have also largely rebuilt inventories depleted during lockdowns. There is evidence that the impact of a massive fiscal and monetary support for economies, while still necessary, has begun to wane as well. Fiscal support is being scaled back, and some G10 central banks have started to reduce quantitative easing.

Although there are signs that Europe is turning a corner after a decade of underperformance against the U.S., it is our view that the evolution of the COVID-19 disease and the efficacy and distribution of vaccines are still likely to have a significant influence on the recovery for at least another year. Also, the level of continuing policy support, the state of corporate and consumer confidence, and the degree of disruption caused by newly agreed post-Brexit trading arrangements are likely to determine the longer-term trajectory of activity.

The pandemic has served as a catalyst for change, accelerating trends that were emerging before the crisis, particularly the shift from the offline to the online world and the further heightening of awareness around sustainability.

In these uncertain times, it is important to be prepared for market dislocations triggered by events. Opportunities may emerge to buy companies at attractive valuations that have become stronger due to the coronavirus crisis and to sell those that are likely to be fundamentally weakened. Among these opportunities, in our view, are high-quality companies, which have lagged markedly since the market rotation sparked by the introduction of vaccines last year.

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 European companies.

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 into our investment process.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

Portfolio Construction

  • Typically 50-80 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%

Recent Performance

  Month to DateData as of 03-Dec-2021 Quarter to DateData as of 03-Dec-2021 Year to DateData as of 03-Dec-2021 1 MonthData as of 31-Oct-2021 3 MonthsData as of 31-Oct-2021
Fund % -0.74% 3.02% 19.37% 5.08% 2.62%
Indicative Benchmark % 0.09% 2.14% 18.69% 4.66% 3.51%
Excess Return % -0.83% 0.88% 0.68% 0.42% -0.89%

Inception Date 26-Feb-2007

Indicative Benchmark: MSCI Europe Index Net

Indicative Benchmark: MSCI Europe Index Net

Performance figures calculated in EUR

Sectors

Total
Sectors
10
Largest Sector Industrials & Business Services 22.20% Was (30-Sep-2021) 20.78%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Europe Index

Top Contributor^

Financials
Net Contribution 0.70%
Sector
0.05%
Selection 0.65%

Top Detractor^

Consumer Discretionary
Net Contribution -0.62%
Sector
-0.20%
Selection
-0.41%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Industrials & Business Services
By7.46%
Fund 22.20%
Indicative Benchmark 14.74%

Largest Underweight

Consumer Staples
By-8.53%
Fund 4.08%
Indicative Benchmark 12.61%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Tobias Mueller, Portfolio Manager ,
We made few positioning adjustments this month for stock specific reasons. We are still finding attractive opportunities among high-quality names despite extended valuations. We adjusted our holdings in consumer discretionary, raising our allocation to the sector. We added a leading luxury goods company to the portfolio that we believe is on the brink of stronger sales growth, while we exited a maker and retailer of high-quality affordable jewellery after a strong run.

Countries

Total
Countries
12
Largest Country United Kingdom 20.11% Was (30-Sep-2021) 21.81%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Europe Index

Top Contributor^

Switzerland
Net Contribution 0.82%
Country
0.06%
Selection 0.76%

Top Detractor^

Germany
Net Contribution -0.61%
Country
0.03%
Selection
-0.64%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Italy
By3.65%
Fund 7.46%
Indicative Benchmark 3.81%

Largest Underweight

France
By-5.82%
Fund 11.80%
Indicative Benchmark 17.62%

Monthly Data as of 31-Oct-2021

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

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (EUR) Minimum Subsequent Investment (EUR) Minimum Redemption Amount (EUR) 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 0.75%
Class Q €1,000 €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.