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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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SICAV

US Large-Cap Value Equity Fund

Invest in large US companies with hidden value and potential overlooked by the market majority.

ISIN LU0885324813 Bloomberg TRPULCQ:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

-0.92%
$525.5m

1YR Return
(View Total Returns)

Manager Tenure

-11.30%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.21
4.20%

Inception Date 31-Jan-2013

Performance figures calculated in USD

Other Literature

31-Oct-2020 - Heather McPherson, Portfolio Manager,
While our outlook for the direction of the market remains uncertain, we anticipate that volatility will continue until there is a medical solution to the pandemic. Due to the increasingly concentrated nature of the large-cap segment of the market, headline market indices mask the weakness of companies exposed to cyclical and secular concerns. We believe our long-term investment horizon will prove useful as we seek to identify companies that look attractive under a “normalised” environment.
John D.  Linehan, CFA
John D. Linehan, CFA, Co-Portfolio Manager

John D. Linehan is the portfolio manager for the U.S. Large Cap Equity Income Strategy, U.S. Select Value Strategy and co-portfolio manager for the US Large-Cap Value Equity Strategy in the U.S. Equity Division. In addition, he is the chief investment officer of Equity and a member of the firm's U.S. Equity Steering and Equity Brokerage and Trading Control Committees. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Click for Manager Outlook
 

Strategy

Manager's Outlook

We are uncertain on the direction of the market from here, but we are confident volatility will continue until there is a medical solution to the pandemic. The economy has been propped up by fiscal and monetary stimulus, but the path of the economic recovery could be impacted by the continued spread of the coronavirus. Additionally, the market has become increasingly concentrated, with a few select names driving headline index performance, which is masking weakness in companies with cyclical and secular concerns.

The size of the uncertainty in the market has caused investors to shrink their time horizons; we have taken advantage of this by extending our time horizon to identify mispriced securities. Ultimately, we believe this is an environment that will favor stock pickers who remained focused on their valuation discipline and invested for the long-term.

We will continue to look for opportunities to lean into cyclicality when valuations are compelling while seeking to maintain a balanced portfolio, adding to more defensive names when the market grows concerned over their durability. Despite the uncertainty, we believe the market will become more discriminate as times goes on and the consistent application of our investment approach during this period, when the market has a short-term focus, will ultimately be rewarded.

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 from large capitalization companies in the United States that are selling at discounted valuations relative to their historical average and/or the average of their industries.

Investment Approach

  • Focus on relative value relationships to opportunistically identify attractively valued companies.
  • Fundamental research is key to uncovering companies with potential for stock price mean reversion.
  • Integrate qualitative inputs to assess potential for improved investor perception.
  • Verify relative valuation anomalies through quantitative analysis.
  • Balance valuation analysis and qualitative overlay.

Portfolio Construction

  • Typically 70-80 stock portfolio
  • Individual positions typically are below 3%, but higher conviction ideas can range to 5%
  • Sector weights will typically vary from 0.5X to 2.0X of primary value sectors of the Russell 1000 Value Index
  • Reserves will range from 0% to 2%

Performance (Class Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -11.30% -0.92% 4.12% 6.92%
Indicative Benchmark % -8.30% 1.16% 5.02% 7.35%
Excess Return % -3.00% -2.08% -0.90% -0.43%

Inception Date 31-Jan-2013

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of  31-Oct-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -10.08% 0.06% 6.41% 7.19%
Indicative Benchmark % -5.78% 1.85% 6.84% 7.63%
Excess Return % -4.30% -1.79% -0.43% -0.44%

Inception Date 31-Jan-2013

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of  30-Sep-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 20-Nov-2020 Quarter to DateData as of 20-Nov-2020 Year to DateData as of 20-Nov-2020 1 MonthData as of 31-Oct-2020 3 MonthsData as of 31-Oct-2020
Fund % 14.76% 13.21% -3.89% -1.35% -1.23%
Indicative Benchmark % 11.53% 10.01% -3.31% -1.36% 0.07%
Excess Return % 3.23% 3.20% -0.58% 0.01% -1.30%

Inception Date 31-Jan-2013

Indicative Benchmark: Russell 1000 Value Net 30% Index

Indicative Benchmark: Russell 1000 Value Net 30% 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.

Index returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 1 June 2019, 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-2020 - Heather McPherson, Portfolio Manager,
U.S. equity returns were mixed for the month, as large-cap shares declined while small- and mid-cap shares advanced. Shifting expectations for a fourth round of fiscal stimulus seemed to drive sentiment throughout the month. President Donald Trump’s seemingly rapid recovery following his coronavirus diagnosis appeared to boost sentiment, as optimism grew about the potential of new treatments. The month’s broader economic data also seemed provided encouragement as jobless claims hit new pandemic lows late in the month. The housing sector also remained a standout. Within the portfolio, the financials sector led relative returns due to stock selection. Shares of American International Group rose following the announcement of the company’s intent to sell off its Life & Retirement business, a move management believes will unlock value for shareholders and other stakeholders by simplifying the corporate structure. Security selection in the information technology sector also benefitted. Conversely, the energy sector detracted from relative returns due to stock selection. Shares of integrated oil company Total fell along with the broader energy sector as macro uncertainty prevailed amid a surge in COVID-19 cases in Europe and the U.S. Security selection in the communication services sector weighed on relative returns.

Holdings

Total
Holdings
86
Largest Holding UPS 3.17% Was (30-Jun-2020) 2.30%
Other View Full Holdings Quarterly data as of 30-Sep-2020
Top 10 Holdings 26.22% View Top 10 Holdings Monthly data as of 31-Oct-2020

Largest Top Contributor^

UPS
By 0.32%
% of fund 3.14%

Largest Top Detractor^

GE
By -0.03%
% of fund 2.29%

^Absolute

Quarterly Data as of 30-Sep-2020

Top Purchase

Coca-Cola (N)
0.77%
Was (30-Jun-2020) 0%

Top Sale

CenterPoint Energy (E)
0.00%
Was (30-Jun-2020) 0.76%

Quarterly Data as of 30-Sep-2020

30-Sep-2020 - Heather McPherson, Portfolio Manager,

We remain focused on our valuation discipline and are looking for opportunities to buy high-quality companies that have been overly discounted, many of which have cyclical exposure.

Consumer Staples

We typically focus our efforts in the consumer staples sector on companies with strong brands and that are trading at attractive valuations relative to their peers and/or history. We also like the stable earnings and dividend yields that consumer staples stocks tend to provide.

  • We built a position in Coca-Cola, a global marketer of nonalcoholic beverages. Although the company was negatively impacted by decreased on-premise consumption during the coronavirus pandemic as restaurants were shut down, we remain encouraged by Coca-Cola's improved fundamentals over recent years. Additionally, in our view, the company is trading at an attractive relative valuation. We believe Coca-Cola has the potential to be a multiyear turnaround story.
  • We sold shares of leading health and personal care product company Kimberly-Clark. The stock has benefited from strong execution and stockpiling behavior since the beginning of the coronavirus pandemic. However, we believe much of the positive sentiment surrounding consumer-packaged goods stocks is already reflected in valuations within the space. Moreover, we are wary of tough comps going into 2021 coming off of coronavirus highs.

Industrials and Business Services

We like several names in this sector, where we invest in companies that reach many different end markets and have solid business models and/or an ability to generate strong cash flows.

  • We purchased shares of Caterpillar, a leading manufacturer of construction and mining equipment as well as engines and turbines. In our view, bottoming fundamentals for Caterpillar and the broader industry created an attractive entry point. We are optimistic about the likelihood of a postelection infrastructure spending bill, regardless of the election outcome. Longer term, we are bullish on new management's strategy to shift toward a more value-added mix of products and services.
  • Cummins manufactures engines and components for commercial vehicles, off-highway equipment, and power generation units. We are optimistic about improving industry fundamentals and believe the stock should benefit from a good cyclical setup. Additionally, we like the company's strong management team, well-known brand, robust distribution network, and continued investment in both diesel and alternative powertrains.
  • Shares of UPS soared as stronger-than-expected consumer demand powered the company to a significant quarterly earnings beat. Given the impressive earnings results, we are optimistic that the company's efforts to address the profitability of its domestic package business and revamp its pricing program are paying off. We sold shares on strength.

Real Estate

Within the sector, we typically hold real estate investment trusts (REITs), which own and frequently operate many different types of income-producing real estate properties. We value the attractive dividend yields that REITs tend to provide.

  • We bought shares of Welltower, a real estate investment trust that invests in senior housing, post-acute care providers, and health systems. In our view, the market is inaccurately discounting Welltower's defensive characteristics and stabilizing fundamentals within senior housing and skilled nursing facilities. We also believe the stock is attractively valued given what we expect will be a long-term step-up in demand for senior housing.

Utilities

The utilities sector contains several companies that deliver durable cash flows and higher dividend yields. Despite the sector's poor relative performance during the initial phase of the coronavirus sell-off, we are attracted to the durability of utility earnings, and we believe efforts to modernize the U.S. electric grid while shifting more power production to renewables offers a multiyear rate-base growth opportunity. We sold shares during the quarter.

  • We pared the portfolio's exposure to CenterPoint Energy throughout the quarter before eliminating the position in September on reduced risk/reward as we believe that the range of outcomes has widened amid the coronavirus pandemic and are concerned about ongoing C-suite turnover.

Sectors

Total
Sectors
11
Largest Sector Financials 20.16% Was (30-Sep-2020) 19.46%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2020

Indicative Benchmark: Russell 1000 Value Index

Top Contributor^

Information Technology
Net Contribution 0.86%
Sector
-0.10%
Selection 0.97%

Top Detractor^

Financials
Net Contribution -1.13%
Sector
-0.04%
Selection
-1.09%

^Relative

Quarterly Data as of 30-Sep-2020

Largest Overweight

Utilities
By3.14%
Fund 9.46%
Indicative Benchmark 6.33%

Largest Underweight

Communication Services
By-5.74%
Fund 3.72%
Indicative Benchmark 9.46%

Monthly Data as of 31-Oct-2020

31-Oct-2020 - Heather McPherson, Portfolio Manager,
The communication services sector contains several types of companies, including media and entertainment businesses and telecommunication services names. Our main industry exposure is to the media industry, where we hold companies that produce or distribute must-see content and typically generate strong cash flow. We also hold select positions in the entertainment industry. In October, we eliminated select names to mitigate the risk of increasing business competition. We also sold shares of certain firms to manage our position size.

Team (As of 01-Oct-2020)

John D.  Linehan, CFA

John D. Linehan is the portfolio manager for the U.S. Large Cap Equity Income Strategy, U.S. Select Value Strategy and co-portfolio manager for the US Large-Cap Value Equity Strategy in the U.S. Equity Division. In addition, he is the chief investment officer of Equity and a member of the firm's U.S. Equity Steering and Equity Brokerage and Trading Control Committees. He also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

John’s investment experience began in 1987, and he has been with T. Rowe Price since 1998, beginning as an investment analyst, covering paper and forest products and the airline industry, in the U.S. Equity Division. From 2003 to 2009, he was the portfolio manager of the US Value Strategy, and from 2009 to 2014, he was head of U.S. Equity and chairman of the U.S. Equity Steering Committee. Prior to T. Rowe Price, John was an executive in the oil trading and consulting industry, first as vice president and managing director for Delaney Petroleum, then as vice president and managing director for E.T. Petroleum. He also was an associate in mortgage-backed securities trading at Banker Trust NY.

John earned a B.A. in economics from Amherst College and an M.B.A. from Stanford Graduate School of Business, where he was the Henry Ford II Scholar, an Arjay Miller Scholar, and the winner of the Alexander A. Robichek Award in finance. John also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2013
  • Years at
    T. Rowe Price
    22
  • Years investment
    experience
    31
Mark S.  Finn, CFA, CPA

?Mark Finn is the portfolio manager of the US Large-Cap Value Equity Strategy, which includes the Value Fund, and co-portfolio manager of the Large-Cap Value Fund in the U.S. Equity Division. He is chairman of the Investment Advisory Committee of the U.S. Large Cap Value Equity Strategy. Mark is also a vice president and an Investment Advisory Committee member of the US Large-Cap Equity Income, Global Natural Resources Equity, US Quantitative U.S., US Quantitative Large, US Mid-Cap Value Equity, and Retirement Strategies.

Mark’s investment experience began in 1998, and he has been with T. Rowe Price since 1990, beginning as controller of Investment Services in the Finance department. After that, he was principal accounting officer for the firm’s realty income strategies and an equity research analyst. Prior to T. Rowe Price, Mark was employed by Price Waterhouse LLP as an auditor, working on engagements for both public and private companies.  

Mark earned a B.S. in accounting from the University of Delaware. He also has earned the Chartered Financial Analyst® designation.

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

  • Fund manager
    since
    2013
  • Years at
    T. Rowe Price
    29
  • Years investment
    experience
    22
Heather K. McPherson

Heather McPherson is a co-portfolio manager for the US Large-Cap Value Equity Strategy and an associate portfolio manager for the US Large-Cap Equity Income Strategy in the U.S. Equity Division. Heather is a member of the firm's U.S. Equity Steering Committee and is a vice president and an Investment Advisory Committee member of the US Large-Cap Equity Income, US Large-Cap Core Equity, US Quantitative Large, Global Natural Resources Equity, US Mid-Cap Value Equity, and US Large-Cap Value Equity Strategies. She is a trustee of the T. Rowe Price Foundation. Heather also is a vice president of T. Rowe Price Group, Inc. 

Heather’s investment experience began in 2001, and she has been with T. Rowe Price since 2002, beginning in the U.S. Equity Division. Prior to this, Heather was employed by Salomon Smith Barney as a summer intern, covering the storage area networking industry. Heather also was employed by Putnam Lovell Securities, Inc., as a vice president of finance and administration.

Heather earned a B.S. in managerial economics from the University of California, Davis, and an M.B.A. from Duke University, The Fuqua School of Business.

  • Fund manager
    since
    2015
  • Years at
    T. Rowe Price
    18
  • Years investment
    experience
    20
Caleb N. Fritz, CFA

Caleb Fritz is a portfolio specialist in the U.S. Equity Division. He acts as a proxy for equity portfolio managers with institutional clients, consultants, and prospects and supports the large-cap value strategies. Caleb also is a vice president of T. Rowe Price Group, Inc.

Caleb’s investment experience began in 2000. He was with T. Rowe Price from 2000 to 2003, beginning in the Participant Service Center, and returned in 2010 until the present. Prior to his current position, he was a lead portfolio analyst providing analytical support to investment, client service, and marketing staff for the firm’s large-cap value and health sciences portfolios. Prior to returning to the firm, Caleb was employed by Legg Mason Capital Management as an associate analyst covering the health care sector.  

Caleb earned a B.A. and an M.A. from the University of South Florida. 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
    13
  • Years investment
    experience
    20
Eric Papesh, CFA, BA, MBA

Eric Papesh is a portfolio specialist based in London in the U.S. Equity Division. Eric supports the US Smaller Companies Equity and US Large-Cap Equity Income Strategies offered in the Europe, Middle East, and Africa and Asia-Pacific regions. Eric is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd. 

Eric’s investment experience began in 1994, and he has been with T. Rowe Price since 2014, beginning in the ISG as a portfolio specialist. Prior to this, Eric was employed by Russell Investments where he focused on U.S. equity investment strategies.

Eric earned a B.A. in business administration, with concentrations in finance and information systems, and an M.B.A. in business administration from the University of Washington. Eric has earned the Chartered Financial Analyst® designation.

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

  • Years at
    T. Rowe Price
    6
  • Years investment
    experience
    26

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% 150 basis points 1.61% Yes
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.70% Yes
Class J $10,000,000 $0 $0 0.00% 0 basis points 0.02% No
Class Q $1,000 $100 $100 0.00% 65 basis points 0.77% 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.