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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

US Large Cap Growth Equity Fund

Seeking to identify investments with the potential to deliver double-digit earnings growth.

ISIN LU0174119775 Bloomberg TRPLGEI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

25.73%
$2.9b

1YR Return
(View Total Returns)

Manager Tenure

35.55%
4yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.00
5.87%

Inception Date 31-Jul-2003

Performance figures calculated in USD

31-Oct-2021 - Taymour Tamaddon, Portfolio Manager,
We remain focused on identifying opportunities where we think that the market does not fully appreciate the possible strength and length of a company’s growth story. We continue to lean heavily on our analyst platform for unique insights as we look for companies that we think are best positioned to manage through the crisis.
Taymour Tamaddon, CFA
Taymour Tamaddon, CFA, Lead Portfolio Manager

Taymour Tamaddon is the portfolio manager of the US Large-Cap Growth Equity Strategy in the U.S. Equity Division. He is a vice president and a member of the Investment Advisory Committees for the Health Sciences Equity, Global Growth Equity, US Growth Stock Equity, and Global Focused Growth Equity Strategies. Taymour is an executive vice president of T. Rowe Price Equity Funds and a vice president of the T. Rowe Price International Funds, Inc., and T. Rowe Price Global Funds. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Trust Company.

Click for Manager Outlook
 

Strategy

Manager's Outlook

Despite the strength and speed of the global economic recovery, potential risks to economic growth persist. Vaccine progress remains slow in parts of the world, and the rapid spread of the delta variant of the coronavirus has emerged as a threat. While the Biden administration is seeking to raise the U.S. corporate tax rate, any increase is likely already baked into U.S. equity markets. However, proposed increases in capital gains and dividend taxes could be negative for after-tax returns on most asset classes. Meanwhile, price-to-earnings multiples in some sectors and stocks imply demanding earnings expectations. The U.S. debt ceiling impasse in Congress has injected uncertainty into financial markets. Markets must also contend with the regulatory crackdown in China, the driver of much of the global economy's growth in recent years.

Nevertheless, growth appears likely to continue in most of the world's major economies over the coming months. We remain focused on the area where we believe we have an edge and can potentially add the most value over a full economic cycle: identifying opportunities where we think that the market does not fully appreciate the possible strength and length of a company's growth story. As such, we continue to lean heavily on our analyst platform for unique insights as we look to identify the companies that we think are best positioned to manage through the current environment. Overall, we will continue to favor companies that have more control of their destiny, are positioned to benefit from powerful secular trends, and are using innovation to disrupt less efficient business models and create new ones.

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 from large capitalization companies in the United States that have the potential for above-average and sustainable rates of earnings growth.

Investment Approach

  • Scrutinize both company and industry- level fundamentals to identify companies with characteristics that support sustainable double-digit earnings growth.
  • Focus on high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments.
  • Exploit differences between secular and cyclical trends.
  • Limit portfolio holdings to the most attractive growth opportunities across industries.
  • 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 60-75 stock portfolio
  • Individual position sizes typically range +/- 1.00% to 4.00% relative to Russell 1000 Growth Index
  • Sector weights will vary from 0.5X to 3.0X for primary sectors relative to Russell 1000 Growth Index

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % 35.55% 25.73% 25.06% 19.54% 25.31%
Indicative Benchmark % 42.88% 29.00% 25.05% 18.93% 25.16%
Excess Return % -7.33% -3.27% 0.01% 0.61% 0.15%

Inception Date 31-Jul-2003

Manager Inception Date 31-Dec-2016

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Data as of 31-Oct-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 27.62% 20.98% 24.09% 20.65%
Indicative Benchmark % 27.02% 21.62% 22.40% 19.18%
Excess Return % 0.60% -0.64% 1.69% 1.47%

Inception Date 31-Jul-2003

Indicative Benchmark: Russell 1000 Growth Net 30% Index

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 % -1.03% 2.49% 16.84% 3.84% 1.62%
Indicative Benchmark % -1.77% 7.35% 22.49% 8.65% 6.36%
Excess Return % 0.74% -4.86% -5.65% -4.81% -4.74%

Inception Date 31-Jul-2003

Indicative Benchmark: Russell 1000 Growth Net 30% Index

Indicative Benchmark: Russell 1000 Growth Net 30% Index

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 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-Oct-2021 - Taymour Tamaddon, Portfolio Manager,
U.S. stocks advanced in October, rebounding strongly from September’s losses. As measured by various Russell indices, large-cap shares outperformed small- and mid-caps. Russell indices also indicated that growth stocks outperformed value across all market capitalizations. Within the S&P 500 Index, all sectors advanced. Consumer discretionary, energy, and information technology stocks posted the largest gains, while communication services and consumer staples lagged. Within the portfolio, the consumer discretionary sector detracted the most from relative results due to stock choices. Stock selection and a detrimental overweight allocation in communication services also hurt relative performance. The information technology sector also detracted from returns due to adverse stock selection. Health care provided the largest boost to relative performance due to positive stock choices, while an unfavourable overweight allocation capped returns. Not owning any names in the consumer staples sector also assisted returns; we have minimal exposure to stocks in this sector as it generally lacks compelling growth opportunities that meet our investment criteria.

Holdings

Total
Holdings
69
Largest Holding Microsoft 9.18% Was (30-Jun-2021) 8.75%
Other View Full Holdings Quarterly data as of  30-Sep-2021
Top 10 Holdings 52.12% View Top 10 Holdings Monthly data as of  31-Oct-2021

Largest Top Contributor^

Alphabet
% of fund 9.58%

Largest Top Detractor^

Amazon.com
% of fund 8.61%

^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

Amphenol (N)
0.73%
Was (30-Jun-2021) 0%

Top Sale

Alphabet Class A
6.67%
Was (30-Jun-2021) 6.78%

Quarterly Data as of 30-Sep-2021

30-Sep-2021 - Taymour Tamaddon, Portfolio Manager,

In our view, the trajectory of equity markets heading into 2022 depends on several competing crosscurrents, which creates uncertainty and a wide range of potential outcomes. With elevated multiples across much of the market, we are staying mindful of valuations given the risk for rate hikes and subsequent multiple contraction. Additionally, the pandemic is continuing to serve as an accelerant to many secular growth trends and is causing material changes to consumer behavior; therefore, we continue to focus on how to best position ourselves for those changes in behavior that we believe will remain permanent and avoid those that are likely to be transitory.

Information Technology

Disruptive business models and technologies within the sector continue to present compelling investment opportunities. Secular demand for public cloud computing services continues to be a growth driver. We also continue to favor companies driven by the convergence of communications and computing, including internet software companies, and those that will benefit from broad global tailwinds in digital payments.

  • We purchased shares of Amphenol, an industrial supplier of sensors, cables, and connectors to a broad diversity of attractive and growing end markets, including military, telecommunications, and automotive applications. We believe the shares offer a favorable risk/reward trade-off. The company generates significant cash flow, is financially flexible, and is led by a capable management team with a proven track record of solid capital allocation.
  • Global Payments is a U.S.-centric merchant acquirer and leading provider of cloud and enterprise applications to help businesses simplify operations and offer customer-friendly payment solutions. We added shares on weakness after a long-awaited recovery in merchant payment volumes outside of the U.S. failed to materialize during the recently ended quarter. Investors are also contending with new competitive threats within the payments space that could disrupt legacy merchant acquirers. Despite the market's harsh reaction, we continue to see potential in Global Payments for intermediate-term earnings growth, driven by stronger revenues from technology products and synergies from acquisitions.

Consumer Discretionary

We are optimistic about stock-specific opportunities within the consumer discretionary sector. We favor businesses benefiting from the secular shift of consumer spending to online products and services. We believe that industries such as physical retail and traditional media are secularly challenged, and we will continue to emphasize companies within the sector that we think are on the right side of change and disruption.

  • We partially trimmed our position in Aptiv, a manufacturer of vehicle components like electrical architecture for electric vehicles and sensors for active safety systems, in favor of other compelling opportunities, but we remain constructive on the name.
  • We bought shares of Coupang, a leading South Korean e-commerce firm, on weakness as shares slid amid concerns over diminished near-term earnings visibility and constrained fulfillment capacity. We feel the company can leverage its wide moat in logistics technology to offer consumers better merchandise selection, faster delivery, and lower prices than many of its competitors and, in doing so, continue to grow its market share. We also value Coupang's differentiated business strategy that enables it to manage its operating costs better than its competitors. At current prices, we believe the company offers an attractive risk/reward trade-off.

Communication Services

Within the sector, we are focused on companies that are benefiting from the shift of advertising spending to digital and social media channels. We also favor wireless communication services firms with strong company-specific growth prospects and competitive advantages or differentiated business models.

  • We added shares of Spotify Technology on weakness. Shares of the largest global audio streaming service slumped following the release of underwhelming monthly average user numbers in their second-quarter earnings report. We believe the company's scale, higher-margin advertising, and artist promotion adjacencies provide it with a viable path to double-digit profit margins.
  • We modestly reduced our overweight position in Chinese internet giant Tencent Holdings following a wave of new regulations in the country, including increased scrutiny over video game approval. Despite a fluid regulatory landscape that is still taking shape, we believe Tencent is the best positioned company in Chinese mobile internet, with ample opportunity to further monetize its large, rapidly growing user base. In addition to mobile internet, Tencent possesses broad capabilities, including online payments, online finance, and cloud computing services.

Sectors

Total
Sectors
6
Largest Sector Information Technology 39.39% Was (30-Sep-2021) 38.04%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: Russell 1000 Growth Index

Top Contributor^

Industrials & Business Services
Net Contribution 0.47%
Sector
0.33%
Selection 0.14%

Top Detractor^

Consumer Discretionary
Net Contribution -1.28%
Sector
-0.05%
Selection
-1.23%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Communication Services
By12.91%
Fund 25.14%
Indicative Benchmark 12.24%

Largest Underweight

Information Technology
By-5.48%
Fund 39.39%
Indicative Benchmark 44.87%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Taymour Tamaddon, Portfolio Manager,
In our view, the trajectory of equity markets heading into 2022 depends on several competing crosscurrents, which creates a wide range of potential outcomes. With elevated multiples across much of the market, we are staying mindful of valuations given the risk for rate hikes and multiple contraction. The pandemic is continuing to accelerate many secular growth trends and is causing material changes to consumer trends; therefore, we continue to focus on how to best position the portfolio for those changes in behaviour that we believe will be permanent and avoid those that are likely to be transitory.

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% 150 basis points 1.58%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.69%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.73%

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