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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

Other Literature

31-Oct-2019 - Anh Lu, Portfolio Manager,
We remain constructive about the long-term outlook for Asia ex-Japan equities, which is supported by broad stability in the region’s economies. The U.S.-China trade conflict remains a headwind; however, we are focussed on looking for companies that are less vulnerable to this key risk. In Hong Kong, we are finding undemanding company valuations as the equity market has suffered amid months of protests in the territory and from the U.S.-China trade dispute.
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 outlook for Asia ex-Japan equities, supported by the broad stability in regional economies and the dovish policy of a number of central banks. We are cognizant that the trade conflict between the U.S. and China may be protracted and will remain a key risk.

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 resolution to the trade war between the U.S. and China. Valuations in Asia ex-Japan appear reasonable relative to both their long-term history and to developed markets.

We think that in China, policymakers will likely pursue measured easing and that large-scale stimulus measures are unlikely. China will likely continue transitioning its economy with care, aiming to balance growth stabilization with deleveraging efforts, in our view.

On India, we continue to await the recovery in the capital expenditure cycle which is taking much longer than expected. We believe in the country's long-term growth potential due to its favorable demographics. In parts of Southeast Asia, the improved regulatory environment augurs well for certain sectors.

In the region's IT supply chain, resumption in capital expenditure spending, which has been delayed by the trade conflict, is a positive development. We continue to like innovative Asian businesses with an edge in research and development. The drive of Asian companies toward innovation enhances the region's growth prospects, as firms spend more on research and development to become more competitive globally.

Aside from the lingering U.S.-China trade dispute, we consider a reflationary environment as one of the biggest risks to the portfolio's relative performance, although we currently see no near-term catalysts for a reflationary regime.

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 % 22.54% 10.35% 5.48% 5.32%
Indicative Benchmark % 13.24% 8.46% 4.76% 4.72%
Excess Return % 9.30% 1.89% 0.72% 0.60%

Inception Date 31-Jan-2013

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  31-Oct-2019

  1 YR 3 YR
5 YR
Since Inception
Fund % 5.75% 7.95% 5.19% 4.73%
Indicative Benchmark % -3.44% 6.32% 4.23% 4.08%
Excess Return % 9.19% 1.63% 0.96% 0.65%

Inception Date 31-Jan-2013

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of  30-Sep-2019

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 04-Dec-2019 Quarter to DateData as of 04-Dec-2019 Year to DateData as of 04-Dec-2019 1 MonthData as of 31-Oct-2019 3 MonthsData as of 31-Oct-2019
Fund % -0.28% 4.78% 18.93% 4.26% 4.49%
Indicative Benchmark % -0.77% 4.00% 9.95% 4.55% 1.64%
Excess Return % 0.49% 0.78% 8.98% -0.29% 2.85%

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-Oct-2019 - Anh Lu, Portfolio Manager,
Asia ex-Japan equities advanced for a second straight month in October due to positive developments in the trade talks between the U.S. and China and as major central banks ramped up policy support. India’s stock market rose but slightly trailed the region’s key stock benchmark as investors anticipated more aggressive policy moves even after the surprise corporate tax cut in September. Within the portfolio, our stock choices in India hurt portfolio performance. In particular, owning Kotak Mahindra Bank (KMB), weakened returns as the stock paused following strong year-to-date gains. We continue to view KMB as a high-quality banking franchise. Our stock choices in consumer staples, such as CP All, also curbed performance as shares of the Thai convenience store operator took a breather following significant gains in the first half of the year. We believe CP All, which reported solid underlying results, is a high-quality long-term earnings compounder. In contrast, our positions in select China stocks were a source of strength. Shimao Property worked well, and we see this homebuilder as a beneficiary of China’s consolidating property market.


Largest Holding Tencent Holdings 6.80% Was (30-Jun-2019) 7.00%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 43.44% View Top 10 Holdings Monthly data as of 31-Oct-2019

Largest Top Contributor^

Taiwan Semiconductor Manufacturing
By 3.44%
% of fund 5.71%

Largest Top Detractor^

Tencent Holdings
By -2.68%
% of fund 6.83%


Quarterly Data as of 30-Sep-2019

Top Purchase

Taiwan Semiconductor Manufacturing
Was (30-Jun-2019) 3.85%

Top Sale

Hangzhou Hikvision Digital Technology (E)
Was (30-Jun-2019) 1.02%

Quarterly Data as of 30-Sep-2019

30-Sep-2019 - Anh Lu, Portfolio Manager,

Against the backdrop of persistent trade and geopolitical uncertainties, the portfolio has taken on a fairly defensive character while finding opportunities in a few cyclicals with growth prospects. Valuations of these "growth cyclicals" were below their historical averages and looked attractive.

In Greater China, we sought opportunities in companies that are best placed to benefit from import substitution. These were in areas such as industrials, technology, pharmaceuticals and consumer products. A prolonged US-China trade discord can be expected to result in companies in China and the US substituting with imports from other countries.

China remained our largest country position in the quarter and we continued to increase our exposure to businesses with strong online platforms that we believe can continue to expand. These businesses may be approaching a more mature stage of development, and investors may be underestimating their ability to expand earnings.

We also searched for companies with good secular growth prospects that traded at reasonable valuations. Moreover, we found a number of new mid-cap ideas, mainly in China A shares. We preferred companies operating in industries with better structural growth and those state-owned enterprises with enhanced management incentive programs that are aligned with shareholder interests.

Country-wise, while we increased our relative overweight to China and reduced our underweight to Taiwan, we pared our overweight allocation to India. In Hong Kong, while valuations were lower, we preferred to position ourselves in names less vulnerable to policy risks.

In India, we remained heavily skewed towards privately-owned financials with quality franchises and pared back exposure to more cyclical stocks.

In the developed markets of 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.

From a sector perspective, financials remained our biggest position in absolute terms as we bolstered our existing position in "growth cyclicals." Within consumer staples, our largest relative overweight, we retained our preference for companies that are likely to compound earnings and are poised for further steady growth. In IT, we favored semiconductors and hardware names that are likely to benefit from the memory chip market recovery amid rising demand for artificial intelligence-related applications, cloud gaming, the 5G cycle and new server platforms.

Companies that are boosting their innovation capabilities in areas such as health care, automotive, home appliances, robotics, environment, and other consumer applications are the ones of interest to us. We favour companies that are putting in place improvements by making optimal use of technology in their businesses. We continue to favor companies that are gaining market share and those that will benefit from pricing changes and industry consolidation. We like underappreciated manufacturing businesses with long track records of execution, strong cash flow and high dividend yields. We see value in companies with improving fundamentals due to capital expenditure (capex) discipline.

We Became More Overweight China

In China, we turned more overweight as we found more opportunities on valuation grounds and in companies that we believe can grow market share and compound earnings despite the macroeconomic and trade policy uncertainties.

We continued to add to our positions in businesses with strong online platforms that can continue to expand or those that will benefit from the use of technology in their operations, such as Tencent, and insurers like PICC Property and Casualty, and Ping An Insurance.

We increased our stake in companies that will likely benefit from import substitution as a result of the trade conflict such as Shenzhen Inovance, which produces inverters and controllers and is expanding into factory automation and electric vehicles. We expect this company to gain market share in China's growing industrial automation market.

We initiated a position in TAL Education, a high-quality tutoring provider that generates significant free cash flow and will likely continue to gain share in a highly fragmented market.

We continued to invest in new mid-cap ideas in China A shares. For example, we established a position in Songcheng Performance, one of the better-managed, show-based theme park operators in China, which we view as a beneficiary of domestic travel and leisure growth. We initiated a position in Jiajiayue Group, a food retailer with a focus on fresh products which we view as an earnings compounder in a defensive sector. We think that this fresh food segment will face less pressure from the rapid growth of ecommerce, given that the supply chain is longer and more complicated.

In China, we also favor companies operating in industries with better structural growth such as consumer staples, healthcare and property. We are inclined to invest in companies with enhanced management incentives and these are mostly to be found among state-owned enterprises.

Hong Kong and Taiwan Relative Underweight Reduced

We reduced our underweight in Hong Kong, the worst-performing market in the region during the quarter, by starting a a position in Hong Kong Exchanges & Clearing (HKEX), the largest vertically integrated stock exchange in the region. We think its valuation is reasonable and we view it as being less vulnerable to policy risks than either banks or property stocks, which have cheaper valuations. However, we are looking into HKEX's surprise bid for the London Stock Exchange, given the dilutive nature of the proposed acquisition. Structurally, HKEX will likely continue to benefit from China capital flows due to the cross-boundary investment channel Shanghai-Hong Kong Stock Connect and also the growing derivatives business.

In Taiwan, where we generally hold technology names, we increased our position in Taiwan Semiconductor Manufacturing (TSMC), one of the world's largest contract chipmakers, as the company will likely benefit from the accelerating adoption of 5G, which includes both smartphone and infrastructure chips. TSMC is guiding for higher capital expenditure than last year and in our view will likely benefit from the 5G upgrade cycle in 2020. We like TSMC's strong balance sheet and think the company is well positioned to benefit from the trends of smart cars, artificial intelligence (AI), and 5G in the coming years.

We continue to own companies in Taiwan that benefit from import substitution by Chinese companies such as MediaTek, a fabless semiconductor company that provides chips for wireless communications, and Silergy, which designs and makes a broad range of analog integrated circuits.

We Turned Less Overweight India; Cyclical Exposure Pared

We reduced our relative overweight to India by closing several positions and reducing our exposure to cyclical names as the capital expenditure revival expected prior to the elections failed to materialize and may take a longer time to play out. We eliminated tiremaker Apollo Tyres, which has been hit by the downturn in Europe and by the tougher competition in India. We also cut our position in two private lenders, Axis Bank and ICICI Bank.

We closed our position in engineering and construction firm Larsen and Toubro as we locked in profit. Finally, we sold out of ITC, India's largest cigarette company on concerns that the sector may be facing a tougher regulatory environment under the new government. Tax increases are a recurring concern affecting the company amid already-high cigarette prices and poor volume growth.

We added GRUH Finance to the portfolio, a high-quality rural housing finance company owned by HDFC. Kolkata-based Bandhan Bank is acquiring GRUH Finance, and our position in the latter gave us exposure to Bandhan Bank, a microlending bank that we like, at an effective discount.

We Decreased Our Allocation to Consumer Staples

We decreased�our allocation to consumer staples, our largest sector relative overweight during the quarter, with the elimination of the abovementioned ITC. We also closed our position in Uni-President China, a juice drink producer and instant noodles supplier, on valuation grounds. Moreover, the company's first-half revenue growth continued to disappoint and we see limited upside to this stock without better revenue growth. However, within consumer staples, we established a position in United Spirits, one of India's leading liquor companies. We believe it is poised to improve margins following better cost management, the cleanup of its balance sheet, and cash flow improvement. We think the business is in a position to deliver further steady growth. We also added other consumer staples names, such as the aforementioned Jiajiayue Group. We took the opportunity to increase our holdings in another China A share consumer staples stock, Yixintang Pharmaceutical, following its recent share price decline. The stock fell due to weak second-quarter results brought about by a new one-pharmacist-per-store policy in the southwestern Chinese province of Yunnan, where it dominates the local market. We believe the worst is behind for Yixintang, although it will still need to invest in attracting pharmacists to support its expansion plans. We continue to view Yixintang as a low-beta compounder that will benefit from China's rising health care spending and sector consolidation.

We Decreased Our Overweight to Financials and increased in Industrials and Business Services

We slightly reduced our relative overweight to financials as we trimmed our holdings in the aforementioned Prudential. The unrest in Hong Kong may have weakened the insurer's policy sales. We also cut our stakes in ICICI Bank and Axis Bank as we sought to reduce our exposure to cyclical stocks in India. However, we established due positions in India's GRUH Finance and Hong Kong's HKEX as discussed earlier. We also increased our position in "growth cyclicals" with attractive valuations such as PICC Property and Casualty, the largest property and casualty company in China. Moreover, we added to our position in Ping An following strong underlying performance in the first half of the year.

We turned more overweight in industrials and business services in the third quarter, as we added to our holdings in Shenzhen Inovance which we discussed earlier.

Aside from Shenzhen Inovance, we increased our allocation to CJ Logistics, South Korea's leading parcel services company, which also provides land and maritime transport, cargo handling, and warehouse facilities in Korea and overseas. We view CJ Logistics as a "growth cyclical" with an attractive valuation. We like the fact that management is shifting its focus to profitability from market share growth in the parcel business. In the third quarter, management delivered on higher parcel pricing to offset increases in labor costs and reiterated that it is not looking for any major acquisitions.

We Focused More on Semiconductors, Hardware in IT

IT remained one of our biggest sector allocations in absolute terms, and within it we focused more on semiconductors amid expectations of a recovery in the global memory chip market. Aside from the previously-mentioned TSMC, we increased our exposure to Samsung Electronics, one of the world's biggest memory chipmakers. We believe it is poised to benefit from a DRAM recovery that will be driven by 5G, cloud gaming, and multi-camera smartphone demand. At the end of the second quarter DRAM demand started to pick up and we expect DRAM inventory to decrease.

Within the IT sector, we exited Hangzhou Hikvision, a Chinese maker of video surveillance products and solutions, during the quarter. We viewed Hikvision as a well-managed company with a healthy balance sheet and structural growth potential in areas like high-end camera with artificial intelligence. However, we decided to exit the stock largely due to component shortage concerns as a result of the U.S.-China trade frictions and partly due to environmental, social and governance risk.


Largest Sector Financials 23.32% Was (30-Sep-2019) 23.72%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2019

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

Top Contributor^

Net Contribution 0.84%
Selection 0.84%

Top Detractor^

Net Contribution -0.07%


Quarterly Data as of 30-Sep-2019

Largest Overweight

Consumer Staples
Fund 10.67%
Indicative Benchmark 5.41%

Largest Underweight

Fund 0.00%
Indicative Benchmark 4.24%

Monthly Data as of 31-Oct-2019

31-Oct-2016 - Anh Lu, Portfolio Manager,
Consumer staples remains our biggest overweight position as we are optimistic about growth prospects for the sector. Meanwhile, we trimmed our position in financials, our biggest underweight, due to valuation concerns, and in China amid worries about non-performing loans. We also moved further underweight to the real estate sector.


Largest Country China 43.44% Was (30-Sep-2019) 41.08%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2019

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

Top Contributor


Top Detractor


Largest Overweight

Fund 43.44%
Indicative Benchmark 37.53%

Largest Underweight

Fund 10.66%
Indicative Benchmark 13.97%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - Anh Lu, Portfolio Manager,
We increased our allocation to China, which was our biggest country position in absolute and relative terms in October. We established a new position in a fast food chain operator that offers decent growth potential, strong cash generation, and uses technology to help streamline its business. We also started a position in an appliance maker whose 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, potential rerating and further market consolidation.

Team (As of 31-Aug-2019)

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 Minimum Subsequent Investment Minimum Redemption Amount Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges UK Tax Reporting Status
Class A $15,000 $100 $100 5.00% 160 basis points 2.04% No
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 1.09% Yes
Class Q $15,000 $100 $100 0.00% 75 basis points 1.17% Yes

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

T. Rowe Price Funds SICAV and its sub-funds are domiciled in Luxembourg and therefore considered offshore funds for UK tax purposes. Selected share classes of T. Rowe Price Funds SICAV have been designated “Reporting Funds” by HM Revenue & Customs (HMRC) under the guidelines of the UK Offshore Funds Regulation. These share classes report all relevant tax information to HMRC on an annual basis. Details on the information reported are outlined in the SICAV Shareholder Tax Reporting document that is available in the Fund Range Docs drop-down. Investors in “Reporting Fund” share classes who are considered United Kingdom residents for tax purposes will have any accrued gains treated as a capital gain rather than income upon sale or other disposal of their shares. 

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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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