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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

Diversified Income Bond Fund

The fund invests mainly in a diversified portfolio of high yield corporate bonds from issuers around the world, including emerging markets.

ISIN LU1244139405 Bloomberg TRPGMSQ:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

5.72%
$149.3m

1YR Return
(View Total Returns)

Manager Tenure

5.75%
2yrs

Information Ratio
(3 Years)

Tracking Error
(3 Years)

0.16
6.78%

Inception Date 15-Dec-2016

Performance figures calculated in USD

30-Sep-2021 - Ken Orchard, Portfolio Manager,
Economic growth appears to have passed its peak, while accommodative policy is easing from historically high levels. Inflation dynamics, particularly in Europe and other developed markets, may be more persistent versus market expectations. Our credit outlook is more benign. Valuations are tight, and liquidity has peaked, but corporations are fundamentally sound as they approach year-end.
Kenneth A.  Orchard
Kenneth A. Orchard, Portfolio Manager

Kenneth Orchard is a senior portfolio manager in the Fixed Income Division and a member of the Global Fixed Income Investment team. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

 

Strategy

Investment Objective

To maximise the value of its shares through both growth in the value of, and income from, its investments. The fund invests mainly in a diversified portfolio of bonds of all types from issuers around the world, including emerging markets.

Investment Approach

  • To seek diversified sources of income and return by utilizing the full global opportunity set and managing risk.
    • Active tactical allocation across an expanded global opportunity set of 14 fixed income sectors, 80+ countries, and 40+ currencies.
    • Best ideas security selection from proprietary global research platform.
    • Actively diversify risk across both quantitative risk factors and qualitative investment themes.
    • Avoid concentration in any one sector or interest rate cycle.
    • Focus on risk-adjusted returns over a medium to long-term horizon.
  • Target tracking error range: 100-500 basis points
  • 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

  • Up to 50% of assets may be unhedged to exploit currency valuation opportunities
  • 40% of bonds may be invested outside of the U.S.
  • High Yield: Max 50%, excluding securitized assets
  • Emerging Markets: Max 25% Hard Currency, Max 25% Local Currency
  • Portfolio Average Credit Quality: Target Investment Grade
  • Duration range: 0 to 8 years
  • Number of securities: 200-500

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Since Manager Inception
Annualised
Fund % 5.75% 5.72% N/A 5.10% 6.13%
Indicative Benchmark % -0.56% 4.64% N/A 3.73% 4.85%
Excess Return % 6.31% 1.08% N/A 1.37% 1.28%

Inception Date 15-Dec-2016

Manager Inception Date 31-Oct-2018

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Data as of 30-Sep-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 5.75% 5.72% N/A 5.10%
Indicative Benchmark % -0.56% 4.64% N/A 3.73%
Excess Return % 6.31% 1.08% N/A 1.37%

Inception Date 15-Dec-2016

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Data as of 30-Sep-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Oct-2021 Quarter to DateData as of 15-Oct-2021 Year to DateData as of 15-Oct-2021 1 MonthData as of 30-Sep-2021 3 MonthsData as of 30-Sep-2021
Fund % -0.47% -0.47% 1.04% -0.70% 0.40%
Indicative Benchmark % -0.18% -0.18% -1.61% -0.94% 0.09%
Excess Return % -0.29% -0.29% 2.65% 0.24% 0.31%

Inception Date 15-Dec-2016

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged 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.

30-Sep-2021 - Ken Orchard, Portfolio Manager,
Global fixed income markets, as measured by the Bloomberg Global Aggregate Index, generated negative total returns in U.S. dollar-hedged terms as longer-term sovereign bond yields continued to rise in September. Investment-grade credit spreads were mostly unchanged while emerging markets spreads widened the most. The DXY, a U.S. dollar currency index, returned 1.73% for the month as the dollar strengthened. The fund posted negative absolute results. A long duration position in Chile weighed on total returns. The central bank surprised markets by hiking rates by 75 basis points at the beginning of September when the consensus was a 50-basis-point increase. Other factors putting upward pressure on local interest rates included legislation allowing a fourth pension withdrawal advanced in Chile’s congress and rising inflation. On the positive side, our exposure to inflation-linked debt in the U.S. contributed as inflation expectations remain elevated.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 27.52% Was (31-Aug-2021) 27.03%
Other View Top 10 Issuers

Monthly data as of30-Sep-2021

Holdings

Total
Holdings
366
Largest Holding Bonos de la Tesoreria de la Republica en pesos 2.16% Was (30-Jun-2021) 2.89%
Top 10 Holdings 13.94%
Other View Full Holdings Quarterly data as of  30-Sep-2021

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BB A
By % 23.64% -13.95%
Fund 23.95% 15.62%
Indicative Benchmark 0.31% 29.57%

Average Credit Quality

BBB

Monthly Data as of  30-Sep-2021
Indicative Benchmark:  Bloomberg Global Aggregate Bond USD Hedged Index

Sources for Credit Quality Diversification: Moody's Investors Service and Standard & Poor's (S&P) split ratings (i.e. BB/B and B/CCC) are assigned when the Moody's and S&P ratings differ. Short-Term holdings are not rated.

Maturity View maturity analysis

  Largest Overweight Largest Underweight
Maturity 7-10 Years 10+ Years
By % 11.90% -13.09%
Fund 28.41% 11.85%
Indicative Benchmark 16.51% 24.94%

Weighted Average Maturity

6.22 Years

Monthly Data as of  30-Sep-2021
Indicative Benchmark:  Bloomberg Global Aggregate Bond USD Hedged Index

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration 3-5 Years Over 10 Years
By % 12.00% -18.34%
Fund 36.04% 4.69%
Indicative Benchmark 24.04% 23.03%

Weighted Average Duration

4.13 Years

Monthly Data as of  30-Sep-2021
Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Sectors

Total
Sectors
7
Largest Sector Global Sovereign 39.84% Was (31-Aug-2021) 38.35%
Other View complete Sector Diversification

Monthly Data as of 30-Sep-2021

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Largest Overweight

Global High Yield
By16.08%
Fund 16.08%
Indicative Benchmark 0.00%

Largest Underweight

Global Sovereign
By-28.02%
Fund 39.84%
Indicative Benchmark 67.86%

Monthly Data as of 30-Sep-2021

30-Sep-2021 - Ken Orchard, Portfolio Manager,
Changes in sector allocations were minimal over the month. Overall exposure to credit sectors ticked up slightly. We believe the likelihood of a recession over the next six to 12 months is low, but valuations in most credit sectors are still at expensive levels. We added slightly to emerging markets corporates after spreads widened modestly over the previous few months and reduced our exposure in global sovereigns, high yield corporates, and investment-grade corporates.

Regions

Total
Regions
6
Largest Region North America 55.39% Was (30-Jun-2021) 49.95%
Other View complete Region Diversification

Monthly Data as of 30-Sep-2021

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Largest Overweight

North America
By14.76%
Fund 55.39%
Indicative Benchmark 40.62%

Largest Underweight

Japan
By-13.20%
Fund 0.45%
Indicative Benchmark 13.65%

Monthly Data as of 30-Sep-2021

Countries

Total
Countries
59
Largest Country United States 54.23% Was (31-Aug-2021) 53.50%
Other View complete Country Diversification

Monthly Data as of 30-Sep-2021

Indicative Benchmark: Bloomberg Global Aggregate Bond USD Hedged Index

Largest Overweight

United States
By17.05%
Fund 54.23%
Indicative Benchmark 37.17%

Largest Underweight

Japan
By-13.20%
Fund 0.45%
Indicative Benchmark 13.65%

Monthly Data as of 30-Sep-2021

30-Sep-2021 - Ken Orchard, Portfolio Manager,
Total fund duration decreased for the second consecutive month with the most significant reduction coming in the U.S. with U.S. Treasury yields poised to continue their climb higher. Some of the reduction in the U.S. was offset by small increases in Germany and some rotations within emerging markets hard currency where we trimmed Mexico while adding to China and Bahrain.

Currency

Total
Currencies
24
Largest Currency 94.33% Was (31-Aug-2021) 94.00%
Other View completeCurrency Diversification

Monthly Data as of  30-Sep-2021

Indicative Benchmark : Bloomberg Global Aggregate Bond USD Hedged Index

Largest Overweight

U.S. dollar
By 51.80%
Fund 94.33%
Indicative Benchmark 42.53%

Largest Underweight

euro
By -24.56%
Fund -1.28%
Indicative Benchmark 23.28%

Monthly Data as of  30-Sep-2021

30-Sep-2021 - Ken Orchard, Portfolio Manager,
We maintained a short position in the U.S. dollar, making no major currency changes over the month. As other countries tighten at a faster pace than the U.S. Federal Reserve, we expect the U.S. dollar to trade sideways over the immediate term based on investor risk appetite. However, we believe longer-term structural forces for a lower U.S. dollar remain intact.

Team (As of 01-Oct-2021)

Kenneth A.  Orchard

Kenneth Orchard is a senior portfolio manager in the Fixed Income Division and a member of the Global Fixed Income Investment team. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Kenneth has been with T. Rowe Price since 2010, initially as a sovereign analyst and with responsibility for the European macro outlook and then joining the global fixed income portfolio management team in 2013. He is currently the portfolio manager for the Global Multi-Sector Bond and Diversified Income Bond Strategies and co-portfolio manager for the International Bond Strategies. He also is the cochair of the fixed income Sector Strategy Advisory Group and a member of the European and UK Asset Allocation Committees. Kenneth’s investment experience began in 1998 at HSBC Asset Management in Canada. Following a period at Emerging Markets Economics as a consulting economist, he was employed by Moody’s Investors Service as a senior credit officer in the sovereign group, and he was involved in designing and improving aspects of the sovereign rating methodology.

Kenneth earned a B.A. in international relations from the University of British Columbia and an M.Sc. in public financial policy from the London School of Economics. Kenneth also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2018
  • Years at
    T. Rowe Price
    10
  • Years investment
    experience
    17
Terry  A.  Moore, CFA

Terry Moore is a portfolio specialist in the Fixed Income Division. He is a member of the Global Multi-Sector, Dynamic Global Bond, International Bond, and Customized Fixed Income Solutions teams, working closely with clients, consultants, and prospects. Terry is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Terry’s investment experience began in 1994, and he has been with T. Rowe Price since 2009, beginning in the Fixed Income Division. Prior to this, Terry was employed by Smith Breeden Associates as a portfolio manager and principal, where he led the Financial Institutions Group and managed fixed income portfolios with a focus on residential mortgage-backed securities. He also was employed by Goldman Sachs & Co., where he traded asset-backed securities.

Terry earned a B.A. in economics and political science from the University of North Carolina, Chapel Hill and an M.B.A. from Duke University, The Fuqua School of Business, where he was a Fuqua Scholar. 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
    11
  • Years investment
    experience
    25

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% 100 basis points 1.17% No
Class I $2,500,000 $100,000 $0 0.00% 50 basis points 0.60% No
Class Q $1,000 $100 $100 0.00% 50 basis points 0.67% 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.