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European Smaller Companies Equity Fund

Seeking to identify tomorrow’s winning European growth companies.

ISIN LU1028171921 Bloomberg TRESCQG: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-2014

Performance figures calculated in GBP

Other Literature

31-Oct-2019 - Ben Griffiths, Portfolio Manager,
European equity markets have been volatile this year mainly due to uncertainty about central bank intentions, trade, deteriorating economic fundamentals and political risks. If these issues remain unresolved, we expect volatility to continue. Valuations among European small-caps relative to other groups now appear to be more reasonable. High-growth stocks have more appeal in these volatile conditions, and we believe they continue to offer an attractive entry point for investors.
Benjamin Griffiths
Benjamin Griffiths, Portfolio Manager

Ben Griffiths is the portfolio manager for the European Smaller Companies Strategy and undertakes investment analysis covering European small-cap stocks. Mr. Griffiths is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Click for Manager Outlook


Manager's Outlook

European equity markets have been more volatile this year than last, mainly due to uncertainty about central bank intentions, trade policies and a deterioration in economic fundamentals. Without a resolution to these issues we expect volatile conditions may continue.

The emergence of populist movements across the Continent, the Brexit process and the deterioration in Italy's relationship with the European Union (EU), are contributing to an uneasy geopolitical backdrop, which we continue to monitor.

The twin shocks of the U.S.-China trade dispute and tortuous Brexit process have darkened the outlook for the European economy, which has lost momentum. The prospect of an extensive agreement on trade tariffs between the world's two largest economies appears to be slender given the political constraints faced by the countries' leaders.

Meanwhile, political and economic instability in the UK under the new populist prime minister, Boris Johnson, has reduced expectations of an agreed exit from the EU. Even so, whatever the Brexit outcome, the process of untangling one of Europe's largest trading partners from the single market will be complex and may have a severe impact on both economies.

Externally, the outlook for global economic growth has grown murkier as well, as the trade war weighs on activity and investment intentions. Doubts about the U.S. economy have risen as market indicators such as the Treasury yield curve signal that a recession may be in the offing. Emerging market risks and slowing growth in Asia and China are also affecting export markets for many European companies. Geopolitical risks in Asia cannot be ignored either.

Still, the European Central Bank's accommodative monetary policy stance and two years of improvement in corporate earnings have helped to partly offset investor concerns. Valuations in the European small-cap universe relative to other groups now appear to be more reasonable. Amid the continuing market volatility, high-growth stocks have more appeal on a relative basis and continue to offer an attractive entry point for 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 diversified portfolio of stocks of smaller publicly traded European companies.

Investment Approach

  • Invests in European small- and mid-cap companies capable of sustaining above-average, long-term earnings growth and selling at reasonable prices.
  • Benchmark-unconstrained approach exploits diverse opportunities in developed Europe, peripheral, and European Union (EU) accession countries.
  • Exposure to companies at different stages in the growth cycle offers the potential for more consistent performance across market cycles.
  • Long-term investment horizon emphasizes bottom-up stock selection as the primary source of excess return.
  • Dedicated London-based research team seeks companies with:
    • Attractive industry structure.
    • Compelling business models.
    • Strong growth prospects.
    • Solid management teams.
    • Reasonable valuations.

Portfolio Construction

  • Typically 70-100 stock portfolio
  • Diversification at the security, country, region, and sector levels offers the potential for attractive risk-adjusted returns
  • Bias toward high-quality stocks provides the potential for downside risk protection
  • Risk parameters
    • Emerging Europe exposure: maximum 10%
    • Typical position size: 0.50% to 5.00%
    • Low turnover expected
    • Expected tracking error: 3% to 7%

Performance (Class Q | GBP)

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Since Manager Inception
Fund % -5.02% 6.37% 12.16% 9.69% 9.33%
Indicative Benchmark % 5.93% 7.14% 11.60% 9.32% 9.67%
Excess Return % -10.95% -0.77% 0.56% 0.37% -0.34%

Inception Date 31-Jan-2014

Manager Inception Date 31-Dec-2015

Indicative Benchmark: MSCI Europe Small Cap Index Net

Data as of  31-Oct-2019

  1 YR 3 YR
5 YR
Since Inception
Fund % -13.81% 7.15% 12.07% 9.87%
Indicative Benchmark % -2.43% 7.59% 11.41% 9.49%
Excess Return % -11.38% -0.44% 0.66% 0.38%

Inception Date 31-Jan-2014

Indicative Benchmark: MSCI Europe Small Cap Index Net

Data as of  30-Sep-2019

Performance figures calculated in GBP

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 % -0.85% 2.46% 7.58% -0.12% -4.60%
Indicative Benchmark % -0.92% 2.33% 18.64% -0.11% -1.09%
Excess Return % 0.07% 0.13% -11.06% -0.01% -3.51%

Inception Date 31-Jan-2014

Indicative Benchmark: MSCI Europe Small Cap Index Net

Indicative Benchmark: MSCI Europe Small Cap Index Net

Performance figures calculated in GBP

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 - Ben Griffiths, Portfolio Manager,
The MSCI Europe Small Cap Index rose in October on optimism over a U.S.-China trade deal, a Brexit agreement between the UK and the European Union, and a cut in U.S. interest rates. Small-cap value marginally outperformed growth as investors sought opportunities in cyclical parts of the index that have been beaten down in this year’s rally due to trade and economic uncertainty. Small-caps outperformed mid- and large-cap equities. At the portfolio level, consumer staples was the best-performing sector, due to our choice of securities and underweight exposure, followed by financials, which was helped mainly by a positive effect from stock picking. Favourable stock selection in materials, energy and real estate was also mildly supportive. However, consumer discretionary, communication services and industrials and business services curbed returns, owing to negative stock selection. Within consumer staples, Zur Management reiterated 2019 revenue guidance of about CHF1.6 billion. On the negative side, our holdings in Ted Baker, a UK-based designer clothes brand company, curbed returns in consumer discretionary. The shares dropped at the start of the month as the company declared an interim loss and unexpectedly issued a profit warning. Widespread discounting and consumer uncertainty is weighing on earnings.


Largest Holding Ambu 2.03% Was (30-Jun-2019) 1.72%
Other View Full Holdings Quarterly data as of 30-Sep-2019
Top 10 Holdings 16.13% View Top 10 Holdings Monthly data as of 31-Oct-2019

Largest Top Contributor^

By 0.27%
% of fund 1.83%

Largest Top Detractor^

By -0.11%
% of fund 1.42%


Quarterly Data as of 30-Sep-2019

Top Purchase

B&S Group Sarl (N)
Was (30-Jun-2019) 0.00%

Top Sale

Westwing (E)
Was (30-Jun-2019) 0.65%

Quarterly Data as of 30-Sep-2019

30-Sep-2019 - Ben Griffiths, Portfolio Manager,

Stock-Specific Opportunities Emerged in Volatile Markets

Uncertainty about central bank intentions, economic fundamentals, and trade policies triggered bouts of shifting sentiment and market direction. We took advantage of these conditions to make some adjustments to sector positioning. We still look to build a balanced portfolio with companies that we believe will increase earnings and market share over the medium term and weather economic and political risks such as Brexit.

  • To this end, we opened positions in a range of high-quality growth compounders spanning the consumer discretionary, communication services, and health care sectors.
  • We also trimmed our exposure to health care and information technology, taking profits on strong performance in individual stocks. These sectors remain our largest overweight allocations, in keeping without our growth style.
  • We also maintained a large allocation to consumer discretionary and communication services.
  • Real estate and industrials and business services were still our largest underweights.

Information Technology

The largest position adjustment this quarter was in IT. We reduced our sizable overweight after we took profits on two names that have performed strongly this year: Oxford Instruments, a leading UK-based provider of high-technology tools for R&D, academia, and industrial applications, and Germany-based Wirecard, a global supplier of online payment processing systems.

IT is one of our largest absolute and relative positions, which is consistent with our growth approach. We continue to favor companies in software, IT services, and semiconductors and semiconductor equipment, with innovative and resilient business models that are supported by solid bases of recurring revenues or driven by structural trends.

Wirecard and Keywords Studios, a leading outsourcer of video and digital games, are our largest holdings in IT services. Within software, we hold WANdisco, a big data technology company and specialist in distributed computing, and First Derivatives, a provider of software and consulting services, particularly to finance, technology, and energy organizations. IQE, a leading global manufacturer of advanced semiconductor materials, and Aixtron, a leading Germany-based provider of deposition equipment to the compound semiconductor industry, are our largest investments in semiconductors.

Communication Services

We increased our overweight in communication services, adding Stillfront, a Sweden-based digital games publisher. Our largest industry bet is entertainment, where we hold three other games developers, one of the fastest-growing segments of the industry. Our investments include Codemasters Group Holdings, a well-established UK-based developer and publisher known for its racing games; Team17, a UK-based company that is one of the longest-running independent video game developers; and Frontier Developments, a world management games specialist.

We are also overweight interactive media and services, where we hold Russian internet company Mail.Ru, which offers a range of online communication products and entertainment services; Scout24 Holding, an online classified advertising company active in the retail and auto markets, mainly in Germany; and Karnov Group, a supplier of information solutions for professionals in the areas of legal, tax, and auditing in Scandinavia.

  • We opened a position in Stillfront at an attractive valuation. The company has a strong mergers and acquisitions record, organic growth is robust, and the studios in the group operate together efficiently. The recently acquired Kixeye, a Canadian games developer and publisher of strategy games,�is�now contributing to the bottom line, and we believe that it could make a significant contribution to earnings in the years ahead.


We further pared our underweight allocation to financials, where we have found attractively valued asset managers in the capital markets industry, an area we favor. We added to our�recent investment in Hypoport, a German company that provides technology-based financial services in the credit, real estate, and insurance industries.

We remain overweight the capital markets industry, focusing on the relatively higher-quality asset managers that are durable growth companies. Our largest holdings include Intermediate Capital, a UK-based specialist asset manager; XPS Pension Group, a UK-based holding company that�is engaged in pensions actuarial, consulting, and administration business; and Draper Esprit, a Pan-European venture capital fund that invests in disruptive tech companies at the early stages of growth.

We are underweight banks and insurance, which generally have been stunted by deleveraging, litigation issues, and increased regulation. Among banks, we hold FinecoBank Banca, an Italian financial service company that specializes in online brokerage, and Van Lanschot Kempen, a Dutch diversified bank that is now increasing its focus on wealth and asset management. In the insurance industry, we own the shares of Sabre Insurance, a UK-based provider of auto insurance, and DFV Deutsche Familienversicherung, an innovative online insurance company in Germany that specializes in health, property, and casualty insurance at cheaper rates than the established companies.

  • We increased our position in Hypoport, whose credit, real estate, and insurance platforms are generating strong sales and earnings growth. The company has a high market share among independent mortgage advisors and is now expanding its business for saving and cooperative banks, which make up 60% of the German mortgage market. Hypoport has also started to strengthen its presence in the corporate finance market, building a new platform for SMEs, which could further boost earnings.
  • We exited Banca Generali, the private banking and asset manager arm of Italian global insurer Assicurazioni Generali, taking profits after strong performance. In our view, the stock is now fully valued and has little room to rise further.

Health Care

We reduced our overweight exposure to the health care sector, which is still a key long-term bet. We bought shares in Zealand Pharma, a Denmark-based biopharmaceutical company, but we also sold our holdings in Handicare, a Sweden-based company that provides manual and powered solutions for disabled and elderly people, and Biocartis, a Belgium-based business that specializes in the development of molecular diagnostic systems, especially for the treatment of cancers and infectious diseases.

Our largest industry allocations are life sciences tools and services, health care providers and services, and health care equipment and supplies. In the first, we have a position in Eurofins Scientific, a leading global provider of bioanalytical laboratory testing services. In the health care providers and services industry,�we own Amplifon, an Italian company that distributes, adjusts, and personalizes hearing aids, and Ambea, a Sweden-based company that provides support, training and staffing within health and social care. Within health care equipment and supplies, we are optimistic about innovative companies with strong competitive positioning and leading technology in niche markets. We are invested in Ambu, a Denmark-based provider of diagnostic and life-support devices for hospitals and rescue services globally, which is the largest holding in the portfolio.

  • We opened a position in Zealand Pharma, whose shares have performed strongly this year. We expect more gains after the new chief executive officer unveiled an updated strategy prioritizing independent development and commercialization of its dasiglucagon insulin drug. The company also announced positive results for the drug in phase 3 trials, clearing the way for an early filing of dasiglucagon in its HypoPal rescue kit with the Food and Drug Administration.�
  • We exited Handicare after a period of lackluster performance to recycle funds in better opportunities. We also sold our holding in Biocartis after the company released disappointing first-half results and revised down annual guidance.

Consumer Discretionary

We increased our overweight allocation to the consumer discretionary sector, adding B&S Group, a Luxembourg-based distributor of consumer goods. We own a broad swath of companies, with our largest industry bets in internet and direct marketing; textiles, apparel, and luxury goods; leisure products; and hotels, restaurants, and leisure. In internet and direct marketing, we own shares in Takeaway.com, one of the biggest positions in the portfolio; Trainline, the UK's leading online rail and coach booking platform; and Hellofresh, a Germany-based online provider of meal kits.

Our textiles, apparel, and luxury goods holdings include UK lifestyle brand Joules, which designs clothes, accessories, and homeware, and Watches of Switzerland, a retailer of watches and jewelry in the UK. Our leisure product names include Mips, a maker of helmets for reducing rotational forces on the brain caused by impacts to the head, and Thule, a Sweden-based company that develops and manufactures sport, outdoor, and cargo products. In specialty retail, we have positions in Grandvision, a Dutch optical company providing products and services via a retail network, and SMCP SAS, a French fashion retailer. In hotels, restaurants, and leisure, our largest position is Malta-based Kambi, which provides outsourced online sports betting services.

  • We�invested in B&S Group, taking advantage of share price weakness triggered by poor first-half figures. We expect a meaningful improvement based on further delivery of FragranceNet.com synergies and further strong growth by HGT fueled by strong Asian demand for health and beauty products.
  • We exited Dufry, the world's leading travel retailer, to recycle funds in more interesting opportunities. We had expected better performance on the back of growing global passenger numbers and continuing concession wins. However, a prolonged period of slower-than-expected revenue growth caused the shares to derate.


Largest Sector Health Care 17.62% Was (30-Sep-2019) 17.32%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI Europe Small Cap Index

Top Contributor^

Net Contribution 0.31%
Selection 0.11%

Top Detractor^

Information Technology
Net Contribution -1.32%


Quarterly Data as of 30-Sep-2019

Largest Overweight

Health Care
Fund 17.62%
Indicative Benchmark 9.12%

Largest Underweight

Real Estate
Fund 3.31%
Indicative Benchmark 12.19%

Monthly Data as of 31-Oct-2019

31-Oct-2019 - Ben Griffiths, Portfolio Manager,
We increased our exposure to communication services, investing in a Swedish digital games company. In contrast, we adjusted our health care holdings, reducing our overweight modestly. We opened a position in a biopharmaceutical company and exited Biocartis, a Belgium-based business that specialises in the development of molecular diagnostic systems. The company reported disappointing first-half results and reduced guidance for the year. The company also adopted a direct sales model, which will require significant investment in support and equipment to tackle the U.S. market.


Largest Country United Kingdom 39.37% Was (30-Sep-2019) 36.87%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2019

Indicative Benchmark: MSCI Europe Small Cap Index

Top Contributor^

Net Contribution 0.25%
Selection 0.21%

Top Detractor^

United Kingdom
Net Contribution -2.61%


Quarterly Data as of 30-Sep-2019

Largest Overweight

United Kingdom
Fund 39.37%
Indicative Benchmark 32.56%

Largest Underweight

Fund 0.00%
Indicative Benchmark 3.78%

Monthly Data as of 31-Oct-2019

30-Sep-2018 - Ben Griffiths, Portfolio Manager,
By paring back our position in the aforementioned online payments processor, we reduced our exposure to Germany. Our country positions otherwise did not change materially during the month.

Team (As of 31-Aug-2019)

Benjamin Griffiths

Ben Griffiths is the portfolio manager for the European Smaller Companies Strategy and undertakes investment analysis covering European small-cap stocks. Mr. Griffiths is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Griffiths has 20 years of investment experience, 13 of which have been with T. Rowe Price. Prior to joining the firm in 2006, he was an investment manager with Baillie Gifford.

Mr. Griffiths earned a diploma in investment analysis from Stirling University and an M.Eng. in engineering science from Oxford University. Mr. Griffiths has earned the Chartered Financial Analyst designation.

  • Fund manager
  • Years at
    T. Rowe Price
  • Years investment
Andrew Clifton

Andrew Clifton is a portfolio specialist in the Equity Division at T. Rowe Price. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Clifton has over 30 years of investment experience, nine of which have been at T. Rowe Price. Prior to joining the firm in 2010, he was an executive director at UBS Global Asset Management. Prior to that, he was a vice president at Merrill Lynch.

Mr. Clifton earned a B.Sc. in economics from the London School of Economics and an M.Sc. in econometrics from the University of Southampton.

  • 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 1.73% No
Class I €2,500,000 €100,000 €0 0.00% 95 basis points 1.04% No
Class Q €15,000 €100 €100 0.00% 95 basis points 1.11% 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. 

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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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