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SICAV

Global Focused Growth Equity Fund

Concentrating high conviction positions in leading global investment prospects.

ISIN LU1127969597 Bloomberg TRGFGQE:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

17.19%
$2.1b

1YR Return
(View Total Returns)

Manager Tenure

27.63%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

1.03
5.98%

Inception Date 28-Oct-2014

Performance figures calculated in EUR

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31-Jan-2020 - David J. Eiswert, Portfolio Manager,
Interest rates and inflation remain low, in part because disruption is so prevalent–creating capacity and abundance. We believe this environment will persist. While we continue to like the cyclicals we own, the coronavirus outbreak and Boeing’s decision to halt 737 MAX production could significantly affect global growth in the near term. We are mindful of the portfolio’s balance between cyclical and secular growth names, and are looking to upgrade the quality of our cyclical positions where opportunities arise.
David J. Eiswert
David J. Eiswert, Lead Portfolio Manager

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

We remain in a low-growth, low-interest rate, and high disruption world and believe this will persist. We were well positioned to take advantage of the cyclical rally in the latter part of 2019 and do not currently see any reason to become defensive. We�have been carefully contrarian with the portfolio by leaning into our cyclical names, but we also continued to have exposure to quality, durable growth names that sold off in early autumn.

There are a number of data points that we think could support equity markets in the new year. Trade and Brexit-related tail risks have decreased, and we may have found the bottom in global manufacturing PMIs as well as inflation and interest rate expectations. Year-over-year comparables in the first half of 2020 should be much easier in the global industrial economy as we lap the initial disruptions caused by the U.S.-China trade conflict a year ago. We also expect that the U.S. Federal Reserve is unlikely to interfere with the upcoming elections, so we should continue to have a supportive interest rate environment and money growth.

We view China, which represents our largest country overweight, as a potentially rich source of highly innovative companies that are at the forefront of secular change and disruption. We have used periods of volatility to add to our positions in several of the country's big internet platform companies. While there was a broad-based slowdown in the Chinese economy in 2019, we think it is showing signs of stabilizing and expect that it will gradually improve as the year unfolds, especially as trade tensions ease. The second half of 2020 will be dominated by the U.S. election, and we are conscious of the unpredictability of a presidential race that remains wide open and has the potential to be very disruptive for many sectors.

As always, we are remaining true to our framework: investing in quality companies where we have an insight about improving economic returns in the future and where valuations aren't excessive.�Given our focus on companies on the right side of change, we remain wary of areas that are subject to structural challenges. However, we think there are benefits to being carefully contrarian in select areas where we have differentiated insights.

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 that have the potential for above average and sustainable rates of earnings growth. The companies may be anywhere in the world, including emerging markets.

Investment Approach

  • Single decision maker provides clear accountability.
  • Identify “best ideas” by assessing companies in a global sector context, using bottom-up approach to create focused, high- conviction portfolio.
  • Global research platform uses fundamental analysis to identify companies with superior and sustainable growth prospects, and improving fundamentals.
  • Macroeconomic and local market factors are integrated in stock selection decisions.
  • Valuation appeal is measured against local market and broad sector opportunity set.
  • Broad range of stocks across all capitalizations, incorporating developed and emerging markets.

Portfolio Construction

  • Number of holdings: typically 60-80 stocks
  • Individual positions: Typically 0.5%-5.0%
  • Emerging markets exposure: +/-15% of benchmark
  • Broad sector ranges: +/-15% of benchmark
  • Country ranges: +/-10% of benchmark (U.S.A. is +/-20%)
  • Currency hedging: Currency views incorporated in stock selection
  • Cash target range: Typically less than 5%, Maximum 10%
  • Expected tracking error: 400 to 800 basis points

Performance (Class Q | EUR)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 27.63% 17.19% 15.06% 17.34%
Indicative Benchmark % 20.15% 10.10% 8.90% 10.91%
Excess Return % 7.48% 7.09% 6.16% 6.43%

Inception Date 28-Oct-2014

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Jan-2020

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 36.83% 16.64% 15.55% 16.79%
Indicative Benchmark % 28.93% 10.13% 10.05% 11.06%
Excess Return % 7.90% 6.51% 5.50% 5.73%

Inception Date 28-Oct-2014

Indicative Benchmark: MSCI All Country World Index Net

Data as of  31-Dec-2019

Performance figures calculated in EUR

Recent Performance

  Month to DateData as of 21-Feb-2020 Quarter to DateData as of 21-Feb-2020 Year to DateData as of 21-Feb-2020 1 MonthData as of 31-Jan-2020 3 MonthsData as of 31-Jan-2020
Fund % 5.30% 9.36% 9.36% 3.85% 11.87%
Indicative Benchmark % 4.79% 4.97% 4.97% 0.17% 5.58%
Excess Return % 0.51% 4.39% 4.39% 3.68% 6.29%

Inception Date 28-Oct-2014

Indicative Benchmark: MSCI All Country World Index Net

Indicative Benchmark: MSCI All Country World Index Net

Performance figures calculated in EUR

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-Jan-2020 - David J. Eiswert, Portfolio Manager,
Global equities pulled back in January following the exuberant final months of 2019. Markets turned bearish on escalating tensions between the U.S. and Iran and the rapid spread of the coronavirus in and beyond China. Within the portfolio, our overweight in the information technology sector contributed the most to relative returns. We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. Conversely, stock selection in consumer staples weighed the most on relative returns. Shares of Japanese cosmetics manufacturer Shiseido fell over the month on fears that the firm’s sizable travel and tourism business could be vulnerable to effects from the coronavirus outbreak. We trimmed our position in order to manage our position size in light of these risks.

Holdings

Total
Holdings
75
Largest Holding Samsung Electronics 3.10% Was (30-Sep-2019) 2.86%
Other View Full Holdings Quarterly data as of 31-Dec-2019
Top 10 Holdings 25.52% View Top 10 Holdings Monthly data as of 31-Jan-2020

Largest Top Contributor^

Samsung Electronics
By 0.43%
% of fund 3.10%

Largest Top Detractor^

CME Group
By -0.79%
% of fund 2.02%

^Absolute

Quarterly Data as of 31-Dec-2019

Top Purchase

Charles Schwab (N)
2.61%
Was (30-Sep-2019) 0.00%

Top Sale

Boeing (E)
0.00%
Was (30-Sep-2019) 1.76%

Quarterly Data as of 31-Dec-2019

31-Dec-2019 - David J. Eiswert, Portfolio Manager,

As always, our trading activity during the quarter was mainly driven from the bottom up. The portfolio's sector and region allocations are primarily a result of individual stock considerations but are also influenced, to a lesser degree, by an assessment of macroeconomic and geopolitical considerations. Moving into 2020, we think equity markets could continue to grind higher and, therefore,�have leaned into our cyclical names in areas like semiconductors while also helping to balance risk by investing in high-quality, durable growth companies at attractive valuations.

Sector-wise, our allocations to information technology and consumer discretionary increased, while industrials and business services and financials decreased. Regionally, our allocation to Japan increased, while our exposure to North America decreased.

Information Technology

We have high conviction in the technology sector, as this is an area where rapid market share shifts mean growth companies are plentiful regardless of the broader macroeconomic environment. That being said, there are areas in the sector that we believe are at a greater risk of slowing as we move into 2020, mainly due to either challenging comparables or slowing demand. Therefore, we�have been careful about our stock choices and positioning. In general, we look for innovative companies with the potential to be true market disruptors. The shifts toward greater connectivity, mobility, and use of cloud software applications are powerful long-term trends, and the markets for consumer and enterprise technology products are expanding in all regions. Rapid growth in the use of the internet, particularly in Asia, has yielded many compelling stories with long runways for growth. We also have a sizable exposure to semiconductor stocks that we anticipate should benefit from content growth in automotive and industrial end markets as well as investment in data centers and artificial intelligence.

  • We initiated a position in semiconductor chip maker Qualcomm. Qualcomm has a robust portfolio of intellectual property and patent licenses, particularly as it relates to cell phone technology and network modems, and it is currently the sole 5G modem supplier globally. With the company's recent legal battle with Apple behind them, we think the company should experience accelerating return on capital as 5G modem adoption ramps up and reduced legal fees and buybacks help drive higher earnings and free cash flow.
  • We started a position in KLA, a leading provider of process control and yield management solutions for the semiconductor and related nano-electronics industries. We think KLA is well positioned to benefit from the slowing of Moore's Law, which is driving higher investments in areas that can offer more innovation and competitive advantage. KLA's end markets have also become more diversified, creating more stability and sources for growth.
  • We eliminated our position in computer graphics processor and chip designer NVIDIA. Although we continue to think NVIDIA is a high-quality company, the stock has done well in recent months, and we chose to exit our position in favor of names with greater upside potential.

Consumer Discretionary

The consumer discretionary sector has become increasingly challenged as market disruption, driven in part by rapid changes in consumer behavior and e-commerce, has led to a more dramatic demarcation between winners and losers. The "winners" in the sector are becoming increasingly crowded investments, and, thus, it has become more difficult to find opportunities where we feel we have unique insights into improving returns. Given the polarized structure of the sector, our focus is on high-quality names that are on the right side of change and have dominant market positions. We find internet-based media and select retailing companies particularly attractive, but most of our holdings are driven by product-specific stories.

  • We initiated a position in Magazine Luiza, a Brazilian omnichannel retailer. We think the company is a strong, durable grower that is capable of sustaining well-above industry average growth in physical, e-commerce, and marketplace retail. Magazine Luiza also has a best-in-class management team with an innovative and digital mindset that should help cement the firm's dominant position in Brazil and the region.
  • We started a position in Gree Electric Appliances, the largest air conditioning producer in China. We think residential and commercial air conditioning in China is severely underpenetrated, and the firm stands to benefit significantly from demand growth and its dominant market share. Additionally, the firm's recent exit from a state-owned enterprise (SOE) structure could unlock additional value driven by improved governance and better capital allocation.
  • We sold our position in luxury apparel brand Canada Goose. While Canada Goose's growth trajectory appears strong, escalating environmental, social, and governance (ESG) risks associated with the company's fur sourcing have lowered our conviction and we chose to exit our position in favor of names with more attractive risk/reward profiles.

Industrials and Business Services

We believe that in the current lower growth world, many traditional industrials and business services companies have limited potential to accelerate and, as a result, are underweight the sector based on MSCI industrial classifications. However, we own several semiconductor and automation companies that are classified as technology, but which we view as more industrial technology.

  • We eliminated our position in aerospace manufacturer Boeing. As the controversy surrounding the company's 737 MAX aircraft continued to grow, we felt the risk/reward profile had become less attractive and chose to reallocate funds to names where we have higher conviction.

Financials

We remain underweight the sector as traditional developed market financials face a challenging environment with leading policymakers having recently shifted to a much more dovish stance. Within the sector, we like high-quality capital market firms, security exchanges, and select emerging market banks that we think are undervalued and underappreciated.

  • We eliminated our position in options exchange operator CBOE Global Markets. The stock has performed well for us, and we think there are fewer growth catalysts for the company in the near term, so we chose to reallocate funds to names with greater upside potential.
  • We moved on from our position in UK insurer Hiscox. The company experienced several quarters of lackluster growth and disappointing earnings, pushing our thesis out further than expected. Consequently, we chose to move on from the stock and reallocate to names where we have higher conviction.

Sectors

Total
Sectors
11
Largest Sector Information Technology 33.73% Was (31-Dec-2019) 34.02%
Other View complete Sector Diversification

Monthly Data as of 31-Jan-2020

Indicative Benchmark: MSCI All Country World Index

Top Contributor^

Information Technology
Net Contribution 1.21%
Sector
0.87%
Selection 0.34%

Top Detractor^

Health Care
Net Contribution -0.70%
Sector
0.14%
Selection
-0.84%

^Relative

Quarterly Data as of 31-Dec-2019

Largest Overweight

Information Technology
By15.86%
Fund 33.73%
Indicative Benchmark 17.87%

Largest Underweight

Consumer Staples
By-7.79%
Fund 0.37%
Indicative Benchmark 8.16%

Monthly Data as of 31-Jan-2020

31-Jan-2020 - David J. Eiswert, Portfolio Manager,
The consumer discretionary sector is facing increasing challenges as market disruption, driven in part by rapid changes in consumer behaviour and e-commerce, has led to a more dramatic demarcation between winners and losers. The "winners" in the sector are becoming increasingly crowded investments, and, thus, it has become more difficult to find opportunities where we feel we have unique insights into improving returns. Given the polarised structure of the sector, our focus is on high-quality names that are on the right side of change and have dominant market positions. We find internet-based media and select retailing companies particularly attractive, but most of our holdings are underpinned by product-specific stories.

Countries

Total
Countries
19
Largest Country United States 48.43% Was (31-Dec-2019) 48.14%
Other View complete Country Diversification

Monthly Data as of 31-Jan-2020

Indicative Benchmark: MSCI All Country World Index

Largest Overweight

China
By4.89%
Fund 8.94%
Indicative Benchmark 4.05%

Largest Underweight

United States
By-7.67%
Fund 48.43%
Indicative Benchmark 56.10%

Monthly Data as of 31-Jan-2020

Currency

Total
Currencies
14
Largest Currency U.S. dollar 59.51% Was (31-Dec-2019) 58.76%
Other View complete Currency Diversification

Monthly Data as of 31-Jan-2020

Indicative Benchmark : MSCI All Country World Index

Largest Overweight

U.S. dollar
By 1.73%
Fund 59.51%
Indicative Benchmark 57.79%

Largest Underweight

Canadian dollar
By -2.98%
Fund 0.00%
Indicative Benchmark 2.98%

Monthly Data as of 31-Jan-2020

Team (As of 06-Feb-2020)

David J. Eiswert

David Eiswert is a portfolio manager in the U.S. Equity Division of T. Rowe Price. He is the portfolio manager for the Global Focused Growth Equity Strategy, a role he has held since October 1, 2012. Prior to his current role, Mr. Eiswert was the portfolio manager for the Global Technology Strategy from October 2008 until May 2012. He was a technology analyst from 2003 until 2012. Mr. Eiswert is a vice president of T. Rowe Price Group, Inc.

Mr. Eiswert has 19 years of investment experience, 16 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst at Mellon Growth Advisors and Fidelity Management and Research. He also worked as a consultant in the communications industry.

Mr. Eiswert earned a B.A., summa cum laude, in economics and political science from St. Mary's College of Maryland and an M.A. in economics from the University of Maryland, College Park. He also has earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    16
  • Years investment
    experience
    19
Josh Nelson

Josh Nelson is a director of research in the U.S. Equity Division of T. Rowe Price. Previously, he was an associate portfolio manager for the Global Focused Growth Equity Strategy. He is an Investment Advisory Committee member of the Global Stock Strategy. He also serves on the Equity Steering Committee. Mr. Nelson is a vice president of T. Rowe Price Group, Inc.

Mr. Nelson has 17 years of investment experience, 12 of which have been with T. Rowe Price. He served as a summer intern with T. Rowe Price in 2006, covering agricultural commodities and ethanol companies. Prior to joining the firm in 2007, he was an investment banker for Citigroup Global Markets, Inc.

Mr. Nelson earned a B.S., with honors, in industrial systems and engineering from the University of Florida. He also earned an M.B.A., with honors, in finance from the University of Pennsylvania, The Wharton School.

  • Fund manager
    since
    2009
  • Years at
    T. Rowe Price
    12
  • Years investment
    experience
    17
Kurt A.  Umbarger

Kurt Umbarger is the regional head of the Equity Investment Specialist Group of T. Rowe Price. Previously, he was a global equity portfolio specialist in the International Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

Mr. Umbarger has 26 years of investment experience, all of which have been at T. Rowe Price. He joined the firm in 1992 and has been a portfolio specialist since 2001.  Prior to joining the global equity team in 2005, Mr. Umbarger worked with the international and emerging market equity teams. As a portfolio specialist, he has traveled the world, working closely with institutional clients, consultants, and prospects.

Mr. Umbarger earned a B.S. in finance from Towson University and an M.S.F. in finance from Loyola University Maryland. He also has earned the Chartered Financial Analyst designation and is a Series 6, 7, 63, and 65 registered representative.

  • Years at
    T. Rowe Price
    27
  • Years investment
    experience
    27
Laurence Taylor

Laurence Taylor is a portfolio specialist in the Equity Division at T. Rowe Price, representing the firm's global equity strategies to institutional clients, consultants and prospects. Mr. Taylor is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Taylor has 19 years of investment experience, 10 of which have been with T. Rowe Price. Prior to joining the firm in 2008, Mr. Taylor was a quantitative portfolio manager at AXA Rosenberg, with responsibility for European institutional clients, and began his career at Hewitt Associates in the UK investment practice. At Hewitt, Mr. Taylor provided investment advice to European institutions as a client-facing consultant before specializing in the research and selection of global and regional equity managers in the manager research team.

Mr. Taylor obtained his B.A., with honours, from Greenwich University and has earned the Chartered Financial Analyst designation.

  • Years at
    T. Rowe Price
    11
  • Years investment
    experience
    20
Jennifer O'Hara Martin

Jennifer O'Hara Martin is a global equity portfolio specialist in the U.S. Equity Division of T. Rowe Price. She is a member of the Global Growth Equity, Global Focused Growth Equity, Global Technology Equity, Communications & Technology Equity, Science & Technology Equity, and US Structured Research Equity Strategy teams. Ms. Martin is a vice president of T. Rowe Price Group, Inc.

Ms. Martin has 23 years of investment experience, 14 of which have been at T. Rowe Price. She joined the firm in 2005 as an equity research analyst covering food retailing and discount stores and had portfolio management responsibilities for the firm's US Structured Research Equity Strategy. Prior to joining the firm, she was an equity research analyst at Northern Trust, following telecommunications and business services companies. Ms. Martin was also employed by Merrill Lynch, where she was an investment banking analyst.

Ms. Martin earned a B.S. in agricultural economics from the University of Illinois at Urbana-Champaign and an M.B.A. from Northwestern University, Kellogg School of Management. She presently serves on the Board of Trustees of the Baltimore Museum of Art and as a committee member for the Northwestern University, Kellogg School of Management, Asset Management Practicum.

  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    24

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 $15,000 $100 $100 5.00% 160 basis points 1.77% Yes
Class I $2,500,000 $100,000 $0 0.00% 75 basis points 0.81% Yes
Class Q $15,000 $100 $100 0.00% 75 basis points 0.92% 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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