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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

Asian Opportunities Equity Fund

A concentrated portfolio of high-quality Asian companies.

ISIN LU1071374836 Bloomberg TRAOAQU:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

13.34%
$399.3m

1YR Return
(View Total Returns)

Manager Tenure

13.52%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.58
4.41%

Inception Date 21-May-2014

Performance figures calculated in USD

30-Sep-2021 - Eric C. Moffett, Portfolio Manager ,
While the near-term focus has been on the regulatory clampdown in China, we believe we are nearing the end of this regulatory cycle. We think the government has no intention of derailing the future growth of various sectors but is seeking to bring more balance to the ecosystem and sustain social stability.
Eric C. Moffett
Eric C. Moffett, Portfolio Manager

Eric Moffett is a portfolio manager in the International Equity Division. He manages the Asia Opportunities Equity Strategy and is chairman of the strategy's Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Singapore Private Limited. 

 

Strategy

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.

Investment Approach

  • Seeking long term capital appreciation to come from owning high quality businesses that will reliably compound earnings/ cash flow generation over time.
  • In Asia, this type of company tends to exhibit three key characteristics:
    • Established companies with leading market positions.
    • Good management teams who care about shareholder returns.
    • Returns-focused capital allocation and prudent balance sheet management.
  • Fundamental research is critical in helping us to identify these characteristics and exploit market inefficiencies:
    • Focus on the long term. Be patient.
    • Gain a better understanding of the durability of a company’s prospects than the market.
    • More accurately assess a company’s intrinsic value than other market participants.
  • 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 40-70 stock portfolio
  • Individual positions typically range from 0.50% to 6.00%.
  • Country and sector weightings a residual of stock selection.
  • Cash position typically less than 5%.

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 13.52% 13.34% 12.68% 10.48% 10.48%
Indicative Benchmark % 14.42% 9.19% 10.13% 7.31% 7.31%
Excess Return % -0.90% 4.15% 2.55% 3.17% 3.17%

Inception Date 21-May-2014

Manager Inception Date 21-May-2014

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 30-Sep-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 13.52% 13.34% 12.68% 10.48%
Indicative Benchmark % 14.42% 9.19% 10.13% 7.31%
Excess Return % -0.90% 4.15% 2.55% 3.17%

Inception Date 21-May-2014

Indicative Benchmark: MSCI All Country Asia ex Japan Index Net

Data as of 30-Sep-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 21-Oct-2021 Quarter to DateData as of 21-Oct-2021 Year to DateData as of 21-Oct-2021 1 MonthData as of 30-Sep-2021 3 MonthsData as of 30-Sep-2021
Fund % 5.81% 5.81% 1.33% -4.23% -9.91%
Indicative Benchmark % 3.45% 3.45% -0.20% -4.18% -9.33%
Excess Return % 2.36% 2.36% 1.53% -0.05% -0.58%

Inception Date 21-May-2014

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.

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. 

30-Sep-2021 - Eric C. Moffett, Portfolio Manager ,
Most Asia ex-Japan equity markets fell as investors grappled with the fallout from property developer Evergrande’s debt crisis, and worries about the impact of regulatory curbs in China hitting various sectors. The power shortages in China were a drag. The fund performed broadly in line with the benchmark in September. Stock selection in a Taiwan hurt; the declines were led by a leasing firm whose shares paused for breath following significant year-to-date gains. We think the company will likely benefit from the post-pandemic recovery. Our zero exposure to energy, the sector that outperformed the most, curbed performance further. This sector did not yield opportunities that matched our investment criteria. Stock preferences in consumer staples also hampered portfolio returns. Here, shares of a South Korean cosmetics company sold-off ahead of its results amid expectations of weakness in its China business. In contrast, our stock selection in communication services, notably a South Korean mobile carrier, was beneficial due to favourable results driven by revenue reacceleration, in turn helped by migration towards higher 5G packages. Consumer discretionary was another source of strength. Our underweight position in a Chinese e-commerce firm helped as shares of the ecommerce firm fell amid the difficult regulatory environment.

Holdings

Total
Holdings
59
Largest Holding Taiwan Semiconductor Manufacturing 9.87% Was (30-Jun-2021) 9.13%
Other View Full Holdings Quarterly data as of  30-Sep-2021
Top 10 Holdings 41.64% View Top 10 Holdings Monthly data as of  30-Sep-2021

Largest Top Contributor^

China Overseas Land & Investment
% of fund 2.64%

Largest Top Detractor^

Taiwan Semiconductor Manufacturing
% of fund 9.88%

^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

Ping An Insurance
1.61%
Was (30-Jun-2021) 1.13%

Top Sale

ASML Holding
1.82%
Was (30-Jun-2021) 2.96%

Quarterly Data as of 30-Sep-2021

30-Jun-2021 - Eric C. Moffett, Portfolio Manager ,

Overall, we continued to pursue high-quality, Asia-focused companies that can reliably compound earnings regardless of the economic cycle. We favor cash-generative businesses that tend to be consumer focused and run by experienced management teams. The strength of domestic consumption in the region remains a key theme for the portfolio.�

While our quality bias has been encountering headwinds as of late when markets' attention was focused on value-oriented stocks and before that on high growth securities, we think quality growth stocks with reasonable valuations may gain back favor soon. We remain comfortable with our positioning but in certain sectors during the quarter, we consolidated our holdings to the stocks where we have stronger convictions as they offer better growth prospects and potential upside.

The portfolio maintains its relatively high exposure in consumer-related sectors. We do not have strong country views as we build the portfolio from the bottom up and strive to own the best businesses across the region that meet our investment framework.

Consumer Discretionary

We have a significant exposure to the consumer discretionary sector. Our preference is for cash-generative fast-food restaurants, auto dealers benefiting from China's auto demand recovery and increasing share in a fragmented market. We own e-commerce companies gaining from people working, shopping and consuming media from home and we have diversified our exposure to e-commerce beyond the dominant market players. We also own well-run education companies that we believe will benefit from increased demand for after-school tutoring services.

  • In the education sector, we saw heightened policy uncertainty in the quarter as China is framing new rules to cover the private tutoring industry. We decided to sell shares of TAL Education, an after-school tutoring provider, due to the possible adverse earnings impact and the disruption to business operations of a potential ban. About 80% of TAL's revenues are derived from kindergarten to grade 9 (K-9) level tutoring, which may be the subject of the potential ban.

  • We shifted our education position to New Oriental Education, a well-run provider of tutoring services with net cash in its balance sheet. We expect it to fare better than TAL should a ban be imposed given that it has more high school students and the regulatory changes will focus on those from lower levels. The new rules aim to ease pressure on children and lower family living costs.

  • We consolidated our holdings in the household durable names over the quarter. Hence, we sold shares of Hisense Home Appliances Group, one of the largest white goods companies in China.

  • We decided to switch to shares of Gree Electric where we had more conviction and see more potential upside in the stock given its growth prospects, dominant market share and improving capital allocation.

  • In e-commerce, we bought shares of Meituan, a platform providing services such as food delivery, as we diversified our exposure in this space. The company reported solid first-quarter results and food delivery profit continued to improve with scale and beat expectations. We continue to own Alibaba Group, the country's dominant internet platform.

Materials

The portfolio has a relatively low exposure to the materials sector. Broadly, we do not see many companies in this space that offer durable growth prospects and their earnings have been volatile.

  • We sold POSCO, South Korea's largest steelmaker, as our investment thesis has played out and we see limited potential upside. While the supply and demand dynamics remain favorable, we expect steel prices to peak in the next few quarters.

Industrials and Business Services

We have an overweight in industrials and business services. We own select transport and property management companies which we think are able to weather the economic difficulties wrought by the pandemic with either their strong balance sheet or increased discipline concerning new investments. They are also likely to gain once mobility restrictions are lifted. We favored companies benefiting from the trend toward increased imports created by the U.S.-China trade dispute. In the quarter, we invested in companies that are increasing their share in an expanding market as well as those that will likely benefit from economic reopening.

  • We locked in gains in conglomerate Jardine Matheson, selling its shares following a strong run since we initiated our position.
  • We bought shares of Hongfa Technology, a Chinese maker of relays used in autos, appliances, EV, and smart meters which we see as a share gainer in a growing industry, supported by its cost advantage and fast response ability. We view this stock as a quality, long-term growth story with an undiscounted upside margin.

Financials

We have a sizeable absolute position in the financial sector, and own businesses across the region. This ranges from Indian and Singapore banks with high-quality lending franchises to Chailease, a Taiwanese leasing company with an increasing China and southeast Asian business that will likely benefit from the cyclical recovery post COVID-19.

  • Within the insurance sector, we own AIA, life insurer with a unique footprint in southeast Asia and a growing China business, a strong management team and sound capital position.
  • We sold shares of Hong Kong Exchanges and Clearing as Hong Kong's only securities and derivatives exchange and the sole operator of its clearing houses reported a stellar set of quarterly results that likely represent a short-term cyclical peak, in our view.���

IT

The portfolio has a considerable absolute position in the IT sector, largely concentrated in semiconductor names, which have benefited from the surge in demand for technology devices and gadgets due to increased work-from-home schemes as a result of the pandemic.

  • We hold Infosys, a software services firm in India, which is seen as a beneficiary of the global recovery.

  • This quarter, we sold shares of TSMC, the world's biggest dedicated semiconductor foundry in terms of capacity, and Samsung Electronics, one of the world's largest memory chip manufacturer, following their substantial share price gains last year.� While Samsung's quarterly results beat market consensus, we believe there are indications that we may be nearing the peak of the current upcycle for Dynamic Random Access Memory (DRAM) chips. �DRAM is the type of memory chip that saves data when a device's power is turned on.

  • We bought shares of Vanguard International, a Taiwan-based company that focuses on 8-inch wafer fabrication foundry services. We view it as a well-managed company with good corporate governance and steady dividend growth over time. Over the longer term, 8-inch wafer supply may be tight owing to limited incremental 8-inch wafer capacity expansion mainly due to the lack of depreciated tools in the market. Moreover, we believe Vanguard may be less affected by U.S.-China trade tensions which centers more on leading-edge technology.

Communication Services

The portfolio has a sizable position in the communication services sector in absolute terms. Our focus here is on social media platforms and search engine companies that are benefiting from developments such as increased remote working and consumption of goods and services from home.

  • At the stock level, we bought shares of HKT Trust as we like the Hong Kong telecommunication company's growth prospects and high dividend yield. We view HKT Trust as a defensive stock and its bond-like nature, high-quality mobile subscriber base who are the first to adopt 5G, and strong balance sheet support our position in this stock.

Sectors

Total
Sectors
10
Largest Sector Consumer Discretionary 24.78% Was (31-Aug-2021) 26.27%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2021

Indicative Benchmark: MSCI All Country Asia ex Japan Index

Top Contributor^

Information Technology
Net Contribution 0.76%
Sector
-0.12%
Selection 0.88%

Top Detractor^

Consumer Staples
Net Contribution -0.81%
Sector
0.07%
Selection
-0.88%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Consumer Discretionary
By8.92%
Fund 24.78%
Indicative Benchmark 15.85%

Largest Underweight

Materials
By-4.82%
Fund 0.59%
Indicative Benchmark 5.41%

Monthly Data as of 30-Sep-2021

30-Sep-2021 - Eric C. Moffett, Portfolio Manager ,
We reduced our allocation to information technology as we locked in some of the gains in semiconductor companies following their recent rally to fund our purchases. We increased our exposure to the property sector, which had been hit by the liquidity crisis at Evergrande. In this space, we continue to own property developers and property management companies with strong balance sheets, backed by the central government, and those that we believe can take market share. Consumer discretionary remains our biggest absolute sector position and our largest overweight.

Countries

Total
Countries
10
Largest Country China 38.42% Was (31-Aug-2021) 39.62%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2021

Indicative Benchmark: MSCI All Country Asia ex Japan Index

Top Contributor^

Netherlands
Net Contribution 0.71%
Country
0.71%
Selection 0.00%

Top Detractor^

India
Net Contribution -0.98%
Country
-0.56%
Selection
-0.42%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Philippines
By3.62%
Fund 4.36%
Indicative Benchmark 0.74%

Largest Underweight

South Korea
By-5.90%
Fund 8.56%
Indicative Benchmark 14.45%

Monthly Data as of 30-Sep-2021

30-Sep-2021 - Eric C. Moffett, Portfolio Manager ,
China remains our largest position in absolute terms. In September, we used the weakness in China as an entry point to add to our existing position in financials which had been sold down. In Hong Kong, we increased our overweight position. In both China and Hong Kong, we purchased more shares of insurers that we already owned but had fallen below their fair values amid concerns about the impact of the liquidity crisis at Evergrande and uncertainty about what the Chinese government’s goal of “common prosperity” entailed for the insurance sector.

Team (As of 01-Oct-2021)

Eric C. Moffett

Eric Moffett is a portfolio manager in the International Equity Division. He manages the Asia Opportunities Equity Strategy and is chairman of the strategy's Investment Advisory Committee. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Singapore Private Limited. 

Eric’s investment experience began in 2007, and he has been with T. Rowe Price since 2007, beginning in the Equity department. Prior to this, Eric was employed by Fayez Sarofim & Company as an analyst.

Eric earned an A.B., magna cum laude, in economics from Princeton University and an M.B.A. from Harvard Business School.

  • Fund manager
    since
    2014
  • Years at
    T. Rowe Price
    13
  • Years investment
    experience
    20
Jihong Min

Jihong Min is a co-portfolio manager of the Asia Opportunities Equity Strategy in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Singapore Private Limited.

Jihong’s investment experience began in 2003, and he has been with T. Rowe Price since 2012, beginning in the Investment Equity department. Prior to this, Jihong was an investment analyst with Fortress Investment Group and Geosphere Capital covering Asian financials. Jihong started his career in J.P. Morgan’s Investment Banking Division in New York.

Jihong earned a B.Sc. in business management from the State University of New York, Binghampton.

  • Fund manager
    since
    2021
  • Years at
    T. Rowe Price
    9
  • Years investment
    experience
    18
Nick Beecroft, CFA

Nick Beecroft is the APAC head of the Investment Specialist Group and a portfolio specialist in the Equity Division. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Nick’s investment experience began in 2001, and he has been with T. Rowe Price since 2005, beginning in the Equity Division. Prior to this, Nick was employed by Mercer Investment Consulting as an investment analyst.

Nick earned a B.A., with honors, in contemporary European studies from the University of Southampton. He also has earned the Chartered Financial Analyst® designation.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    20

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 UK Tax Reporting Status
Class A $1,000 $100 $100 5.00% 160 basis points 1.77% No
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.85% No
Class Q $1,000 $100 $100 0.00% 75 basis points 0.92% No

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.