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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.

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SICAV

Global Value Equity Fund

Targeting attractively valued global companies with prospects for improving earnings growth.

ISIN LU0859255472 Bloomberg TRPGVEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

14.35%
$531.9m

1YR Return
(View Total Returns)

Manager Tenure

42.85%
9yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.80
4.55%

Inception Date 28-Nov-2012

Performance figures calculated in USD

31-Oct-2021 - Sebastien Mallet, Portfolio Manager, Global Value Equity Fund,
The global economic recovery continues to strengthen, potentially providing a more sustained positive backdrop for value investing. A more constructive stance in the market’s longer-term prognosis for inflation and interest rates should similarly be supportive. We continue to invest across the value spectrum in the best ideas from our global research platform.
Sebastien Mallet
Sebastien Mallet, Portfolio Manager

Sebastien Mallet is a portfolio manager in the Equity Division at T. Rowe Price, managing the Institutional Global Value Strategy. Mr. Mallet is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Click for Manager Outlook
 

Strategy

Manager's Outlook

As the global economic recovery continues to strengthen over the next 12-18 months, this could provide a more sustained positive backdrop for value investing. A more positive stance in the market's longer-term prognosis for inflation and interest rates should similarly be very supportive.

In the U.S., a record-setting stimulus was passed in order to boost the economic recovery. The vaccine rollout had a strong early start, allowing a relatively rapid return to normal. We find opportunities in well-run, quality companies. Within the financials space, U.S. banks look set to benefit from potentially higher rates, accelerating loan growth and higher rerating and non-life insurance companies with strong pricing ability provide compelling opportunities. In our view, the health care sector also provides ample strong ideas for the long-term.

In Europe, the vaccine rollout had initially progressed slightly more slowly, and economies had been more cautious in fully reopening. Fiscal stimulus measures have been rolled out and monetary policy remains accommodative. Plans are progressing for the Next Generation European Union (EU) Fund, which aims to support EU member countries in their recovery from the impacts of the pandemic. We continue to find opportunities in companies with more cyclical characteristics that stand to emerge on the other side of the pandemic in positions of strength.

We are positive on the near-term outlook for Japan given the recent acceleration in vaccine distribution, coupled with a significant fiscal stimulus response to aid the economic recovery. Crucially for investors in the market, corporate governance in Japan has been improving in recent years, with companies becoming more shareholder friendly. We continue to identify stocks with compelling valuations befitting of our value perspective.

Elsewhere in Asia, we continue to uncover ample compelling opportunities in China, despite market jitters over regulatory developments. The country saw an early but disrupted return to some normalization, although strict restrictions on international travel have remained in place. Our well-resourced research team is finding plenty of opportunities in good companies with compelling valuations.

We concentrate on the bottom-up view and our strategy continues to invest across the value spectrum in the best ideas from our global research platform. We aim to balance our exposure to economically sensitive and "deep value" names; also holding companies with strong free cash flow generation not yet fully appreciated by the market and with the scope to increase shareholder returns; as well as looking for pockets of controversy where fundamentally sound, well-run businesses face unwarranted investor scepticism. Given our robust research platform and collective experience, we are confident in our ability to find these unique opportunities before their potential for substantial prosperity becomes obvious to other investors.

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 undervalued stocks of companies anywhere in the world, including emerging markets.

Investment Approach

  • Diversified portfolio investing in companies located throughout the globe.
  • Emphasize attractively valued companies with prospects for improving earnings growth.
  • Employ rigorous and comprehensive research to identify and assess investment opportunities.
  • Allocate country and sector positions through consideration of:~~Attractiveness of individual investments^^~~Macroeconomic environment^^
  • 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 80-100 stock portfolio
  • Individual positions typically range from 0.30% to 3.00% — average position size of 1.00%
  • Country and sector weights generally range +/- 15% deviation from the benchmark
  • Maximum of 10% in emerging markets
  • Reserves range from 0% to 10%

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 42.85% 14.35% 11.81% 11.29% 11.29%
Indicative Benchmark % 40.42% 18.20% 15.45% 12.57% 12.57%
Excess Return % 2.43% -3.85% -3.64% -1.28% -1.28%

Inception Date 28-Nov-2012

Manager Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of 31-Oct-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 35.96% 10.62% 10.84% 11.01%
Indicative Benchmark % 28.82% 13.14% 13.74% N/A
Excess Return % 7.14% -2.52% -2.90% N/A

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Data as of 30-Sep-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 01-Dec-2021 Quarter to DateData as of 01-Dec-2021 Year to DateData as of 01-Dec-2021 1 MonthData as of 31-Oct-2021 3 MonthsData as of 31-Oct-2021
Fund % 0.16% -0.87% 12.43% 3.14% 3.01%
Indicative Benchmark % -0.44% 2.89% 16.31% 5.66% 3.80%
Excess Return % 0.60% -3.76% -3.88% -2.52% -0.79%

Inception Date 28-Nov-2012

Indicative Benchmark: MSCI World Index Net

Indicative Benchmark: MSCI World 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.

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 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-Oct-2021 - Sebastien Mallet, Portfolio Manager, Global Value Equity Fund,
After a weak September, global stocks rebounded in October. Investors focused on generally strong corporate earnings in most major markets and largely looked past supply chain issues and the prospect of inflation. Most major central banks kept short-term interest rates near zero. Oil prices continued to rise, buoyed by tight inventories and supply discipline. At the portfolio level, our choices of securities within the consumer discretionary, information technology, and industrials and business services sectors held back returns. Our holding in a large payments processing company hindered performance as concerns mounted that fintech companies are disrupting the traditional payments processing space. In Japan, our holding in a large entertainment company that operates bowling alleys weighed as the country’s reopening efforts have been delayed. Conversely, our stock selection in both health care and financials was beneficial. For example, shares of a large health insurer soared after it beat estimates for both quarterly topline growth and earnings as well as raised guidance.

Holdings

Total
Holdings
96
Largest Holding Microsoft 4.30% Was (30-Jun-2021) 3.55%
Other View Full Holdings Quarterly data as of  30-Sep-2021
Top 10 Holdings 25.38% View Top 10 Holdings Monthly data as of  31-Oct-2021

Largest Top Contributor^

Microsoft
% of fund 4.27%

Largest Top Detractor^

T-Mobile US
% of fund 1.33%

^Absolute, percentages based on the difference between the total net assets of the two largest holdings of the fund.

Quarterly Data as of 30-Sep-2021

Top Purchase

Alphabet Class A (N)
2.87%
Was (30-Jun-2021) 0%

Top Sale

Bank of America (E)
0.00%
Was (30-Jun-2021) 2.16%

Quarterly Data as of 30-Sep-2021

30-Sep-2021 - Sebastien Mallet, Portfolio Manager, Global Value Equity Fund,

In the second quarter, we started to reposition the portfolio to a slightly more defensive stance and in the most recent quarter, we continued this shift. These moves reflect the changes in relative valuations between and within sectors that have taken place in recent months. While our portfolio maintains a balance across the value style spectrum, we have booked profits in holdings that have had a strong recovery, reducing our exposure to deeper value companies and moving towards those that offer good free cash flow. �On a sector basis, we made a number of adjustments within health care and financials, lowered our exposure to the typically cyclical industrials and business services sector, and reduced our position in energy-related names.

At the end of September, our major overweight sector positions were in financials, materials, industrials and business services, and health care. The largest underweight sector positions included IT, consumer discretionary, and consumer staples. On a geographic basis, we remain cautious about valuations in the U.S. Although the country represents the largest position in the portfolio on an absolute basis, we retain a significant relative underweight. Our largest relative overweight positions are in China and Japan. We also see value in emerging markets and the UK.

Health Care

The portfolio has an overweight with respect to the health care sector, reflecting our more defensive stance. Over the quarter we identified a new opportunity in the U.S. As the country's economy reopened and investors focused on cyclical growth stocks, health care stocks were left behind; we believe valuations have now reached very attractive levels. Uncertainty over health care reforms in the U.S have also weighed on the sector, despite the fact that this space is home to many companies with good growth prospects.�

  • We began to build a holding in the medical technology company Medtronic, which develops, manufactures, distributes, and sells device-based medical therapies and services. This is a defensive business with an attractive valuation. Furthermore, following a change in management, we believe that the business has scope for a turnaround following several years of underperformance relative to its segment. This optionality does not yet appear to be priced into the stock.
  • We sold out of the Swiss-based multinational healthcare company Novartis, which is engaged in the development, manufacturing, and sale of pharmaceutical products. We have a positive outlook on healthcare overall, which is typically a more defensive, steady growth sector, but underperformed the broader index last year. We find ample attractive ideas for the long-term in this space and therefore chose to focus our allocation on other opportunities.

Financials

We have a significant overweight position in financials. In recent months we have become more cautious on some of our U.S. positions and have shifted our exposure within this space. Elsewhere in the sector, we have selective exposure to European banks and to global insurers.

  • We eliminated our holding in Bank of America, one of the largest U.S. money center banks. The company operates in retail financial services (consumer banking, wealth management, mortgages), trading and wholesale banking. The bank has benefited from the economic recovery and reopening in the U.S. While the portfolio remains overweight the U.S. financials sector overall, we now find more compelling opportunities elsewhere in this space.
  • Some of the proceeds of this sale were used to initiate a position in the custody bank State Street, which operates in over 100 markets globally. While the stock has been an underperformer in recent years, efforts to control expenses and offset fee compression mean that the bank's servicing business is now generating modest levels of profitability before including the contribution from net interest income. We find the valuation reasonable and the risk/reward outlook compelling. Rising rates could provide a further tailwind for the stock.
  • We initiated a holding in Huntington Bancshares, which operates primarily in Ohio, Michigan, and the surrounding Midwestern states. The company offers commercial banking, consumer and business banking and vehicle finance. Following a deep restructure, the business has outperformed in terms of credit quality, operating expenses and fees. We believe that there is scope for further growth in fees. The stock also pays a good dividend relative to its segment in the U.S. In our view, the business' evolution in technology and gains in scale through its recent merger will accelerate its course to be a regional bank leader.

Industrials and Business Services

As cyclical stocks have rallied in recent months, we have been trimming our exposure to names where we felt there was limited further upside in the short term. Although we retain an overweight with respect to industrials and business services, we reduced our exposure, reflecting out more defensive approach.

  • We sold out of our holding in Caterpillar, the leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates in construction industries, resource industries and energy and transportation. We believe that the risk/reward profile has become less compelling and expectations over-inflated. In our view, the company is likely approaching peak growth and margins, which leaves fewer potential catalysts for growth.

Energy

The oil price rose sharply over the course of the third quarter on signs of improving demand, supply discipline from OPEC+, and supply disruptions caused by a hurricane in the Gulf of Mexico. However, we are bearish on the long-term outlook for the oil price and modestly reduced the portfolio's weighting to energy over the review period.

  • We eliminated our holding in the global oil and gas company ConocoPhillips. We view this company as best in class within its segment, with a simple business model, proficient management team and strong balance sheet. However, given our bearish outlook for oil, we believe the risk/reward profile for the stock has become less attractive. There is also a regulatory risk, given the potential for a fracking ban in some states in which the company operates.

Communication Services

Having begun the quarter almost benchmark neutral with respect to the communication services sector, we raised our exposure over the review period to a modest overweight as relative valuations shifted.

  • We built a position in the U.S. internet giant Alphabet, which we believe is one of the world's strongest businesses with multiple opportunities to expand the breadth and depth of its offerings and thereby sustain its profitability. The company has several projects underway which are currently loss-making but are likely to enhance the value of the business in the future. We believe that the market is underappreciating the future profitability, making the valuation attractive at this entry point.
  • We also initiated a position in Prosus. The conglomerate is dominated by a stake in Chinese technology company Tencent, but also offers exposure to other social media ecosystems, classifieds, food delivery businesses and fintech. We believe that Prosus offers an attractive risk/reward profile, as the stock trades at a large discount, given its exposure to key underlying asset Tencent. The latter has been under pressure due to regulatory uncertainty in the Chinese technology sector.

Sectors

Total
Sectors
11
Largest Sector Financials 21.91% Was (30-Sep-2021) 20.83%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI World Index

Top Contributor^

Financials
Net Contribution 0.91%
Sector
0.16%
Selection 0.76%

Top Detractor^

Information Technology
Net Contribution -0.77%
Sector
-0.11%
Selection
-0.66%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Financials
By8.15%
Fund 21.91%
Indicative Benchmark 13.76%

Largest Underweight

Information Technology
By-10.99%
Fund 11.96%
Indicative Benchmark 22.96%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Sebastien Mallet, Portfolio Manager, Global Value Equity Fund,
Within the communication services sector, we initiated a position in a U.S.-based provider of high-speed internet access. The company has withstood many existential threats in recent years, including wireless substitution, video obsolescence, fibre competition, and regulatory risk. We believe the company’s best-in-class management team will continue to generate compounding equity returns through consistent earnings growth, prudent financial leverage, and share repurchases. In our view, the market is underestimating the durability of the company’s free cash flow growth.

Regions

Total
Regions
6
Largest Region North America 62.20% Was (30-Sep-2021) 61.96%
Other View complete Region Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI World Index

Top Contributor^

Developed Europe
Net Contribution 0.14%
Region
-0.04%
Selection 0.18%

Top Detractor^

United States
Net Contribution -0.45%
Region
-0.04%
Selection
-0.41%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Pacific Ex Japan
By3.69%
Fund 6.90%
Indicative Benchmark 3.22%

Largest Underweight

North America
By-9.37%
Fund 62.20%
Indicative Benchmark 71.57%

Monthly Data as of 31-Oct-2021

Countries

Total
Countries
19
Largest Country United States 59.24% Was (30-Sep-2021) 60.13%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI World Index

Largest Overweight

China
By3.52%
Fund 3.53%
Indicative Benchmark 0.00%

Largest Underweight

United States
By-9.05%
Fund 59.24%
Indicative Benchmark 68.28%

Monthly Data as of 31-Oct-2021

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 1.77%
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.85%

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