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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

US Large-Cap Value Equity Fund

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

ISIN LU1028172226 Bloomberg TRUSCQG:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

4.41%
$490.7m

1YR Return
(View Total Returns)

Manager Tenure

0.74%
7yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.14
5.24%

Inception Date 31-Jan-2014

Performance figures calculated in GBP

Other Literature

31-Jan-2021 - Heather McPherson, Portfolio Manager,
The outlook for U.S. equities continues to be uncertain. Near-term volatility remains despite the market’s favourable reaction to the U.S. presidential and Georgia runoff elections. Headline market indices disguise the weakness of companies exposed to cyclical and secular worries due to the increasingly concentrated nature of the large-cap segment. Given this, we believe our long-term investment horizon will be beneficial as we seek to identify companies that look attractive under a more “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

Although we are hopeful a COVID-19 vaccine will end the pandemic, we continue to respect the unpredictability of the disease and remain cautious. We are, however, confident in our portfolio's positioning and believe last year's trading gave us an opportunity to improve the quality of the portfolio, which should improve its resilience should the health crisis worsen. Due to the pandemic, we have seen an unprecedented level of stimulus, both monetary and fiscal, being put into the economy in record time. This stimulus, along with souring relations between China and the U.S., is likely to create higher-than-expected inflation.

From here, we will continue to focus on the long term as we believe the market systematically underestimates companies' ability to go from a weakened state to a more normalized state, which is where we are finding opportunities. Looking at historical cycles, it is hard to determine exactly what causes a cycle to flip, but given the current valuation disparities, we believe more cyclical fare has room to run in the short to intermediate term. Furthermore, moderately higher inflation and yields would be major tailwinds for value stocks, and we believe we are well positioned for that if they were to occur while not taking on additional risk for that optionality.

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 | GBP)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 0.74% 4.41% 11.33% 10.81%
Indicative Benchmark % -0.84% 4.83% 10.59% 10.62%
Excess Return % 1.58% -0.42% 0.74% 0.19%

Inception Date 31-Jan-2014

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of 31-Jan-2021

Performance figures calculated in GBP

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % -2.14% 3.59% 10.12% 10.65%
Indicative Benchmark % -1.14% 4.90% 10.57% 10.98%
Excess Return % -1.00% -1.31% -0.45% -0.33%

Inception Date 31-Jan-2014

Indicative Benchmark: Russell 1000 Value Net 30% Index

Data as of 31-Dec-2020

Performance figures calculated in GBP

Recent Performance

  Month to DateData as of 05-Mar-2021 Quarter to DateData as of 05-Mar-2021 Year to DateData as of 05-Mar-2021 1 MonthData as of 31-Jan-2021 3 MonthsData as of 31-Jan-2021
Fund % 2.01% 8.30% 8.30% 1.89% 16.60%
Indicative Benchmark % 3.82% 6.55% 6.55% -1.41% 9.72%
Excess Return % -1.81% 1.75% 1.75% 3.30% 6.88%

Inception Date 31-Jan-2014

Indicative Benchmark: Russell 1000 Value Net 30% Index

Indicative Benchmark: Russell 1000 Value Net 30% Index

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.

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-Jan-2021 - Heather McPherson, Portfolio Manager,
U.S. stocks were mixed in January after a bout of selling late in the month. As measured by various Russell indices, growth stocks narrowly surpassed value stocks among large-cap shares, but value stocks marginally outperformed growth in the mid- and small-cap space. Stocks surged in the opening weeks of the month due to expectations for substantial new fiscal stimulus from the federal government and broader distribution of coronavirus vaccines. However, stocks retreated toward the end of the month amid concerns about generally high stock valuations and unusual fluctuations in the prices of certain stocks that hedge funds had been selling short. The month also brought confirmation that the economic recovery had slowed, as U.S. nonfarm payrolls in December declined for the first time since April and weekly jobless claims spiked in early January to their highest level since mid-August. Within the portfolio, information technology had the most positive impact due to security selection. Shares of Applied Materials rose over the month, outpacing the sector, due to the growing demand for chipmaking equipment. Our stock choices in materials also helped. Conversely, the consumer discretionary sector dragged due to stock selection and an underweight allocation. Our security choices in health care also hindered relative results.

Holdings

Total
Holdings
87
Largest Holding Morgan Stanley 3.16% Was (30-Sep-2020) 2.88%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 26.12% View Top 10 Holdings Monthly data as of  31-Jan-2021

Largest Top Contributor^

Morgan Stanley
By 0.01%
% of fund 3.16%

Largest Top Detractor^

Ameren
By -0.02%
% of fund 0.85%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Citrix Systems (N)
0.74%
Was (30-Sep-2020) 0%

Top Sale

Verizon Communications (E)
0.00%
Was (30-Sep-2020) 1.24%

Quarterly Data as of 31-Dec-2020

31-Dec-2020 - Heather McPherson, Portfolio Manager,

Over the fourth quarter, we continued to fine-tune our positioning, focusing on identifying high-quality companies trading at attractive relative valuations that are exposed to cyclical end markets. We are confident in how our portfolio is positioned as we enter 2021.

Information Technology

We generally view the information technology sector as cyclical, with many companies operating at different stages within their industry's specific cycle. Within the sector, we favor holdings in the semiconductors and semiconductor equipment industry, which we believe should benefit from the continued proliferation of internet-connected devices.

  • We initiated a position in Citrix Systems after the stock sold off following its third-quarter earnings results, which showed growth in cloud subscriptions and software-as-a-service revenue but fell short of expectations. We believe the company offers a competitive workplace technology business. We also value its transition toward a subscription-based business model that we believe will improve earnings power quality long term.
  • We trimmed our stake in chipset-maker Qualcomm. Shares ended the quarter higher, capping off a strong year, stemming from a fourth-quarter earnings beat and strong forward guidance issued in November. We continue to appreciate the company's prominence in the 5G marketplace and the growing demand for 5G-compatible devices associated with the global transition from 4G to 5G.

Utilities

The utilities sector contains several companies that deliver durable cash flows and higher dividend yields. Despite the sector's poor relative performance over the course of 2020, 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 added to our position in Entergy, an integrated electric and natural gas utility. Entergy fell during the period along with peers amid a second wave of coronavirus infections and the potential decrease in energy demand due to various business restrictions and shutdowns. While we are mindful of the macro uncertainty related to the pandemic, we like the company's attractive relative valuation and attractive rate base growth.

Consumer Staples

We typically focus our efforts in the consumer staples sector on companies with strong brands 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 eliminated our position in PepsiCo during the quarter. We believe the stock is fully valued by the market and rotated into other positions that we felt carried a more attractive risk/reward ratio.
  • We sold shares of Tyson Foods throughout the period to moderate our position size, as the company came under fire during the period after negative reports surfaced of management's actions related to the coronavirus. While we are cognizant of the challenges the company faces, we believe Tyson Foods is well positioned to benefit from a move toward cyclical strength in the chicken market and improving margins.

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 initiated a position in AvalonBay Communities �during the period. AvalonBay Communities is one of the largest apartment REITs, with a focus on locations on the East and West Coasts, specifically in regions with higher incomes in urban and transit-oriented suburban locations. Apartment REITs have struggled this year due to concerns about tenant's ability to continue making rent payments. In our view, the name presented an attractive relative valuation, particularly due to its well-located assets, strong balance sheet, and quality management team.

Sectors

Total
Sectors
11
Largest Sector Financials 21.12% Was (31-Dec-2020) 21.45%
Other View complete Sector Diversification

Monthly Data as of 31-Jan-2021

Indicative Benchmark: Russell 1000 Value Index

Top Contributor^

Financials
Net Contribution 1.43%
Sector
0.17%
Selection 1.26%

Top Detractor^

Energy
Net Contribution -0.18%
Sector
0.22%
Selection
-0.40%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Information Technology
By3.34%
Fund 13.07%
Indicative Benchmark 9.73%

Largest Underweight

Communication Services
By-5.12%
Fund 4.40%
Indicative Benchmark 9.51%

Monthly Data as of 31-Jan-2021

31-Jan-2021 - Heather McPherson, Portfolio Manager,
We have a varied view of the health care sector, considering the myriad challenges and opportunities health care companies face, including potential drug pricing reform, mergers and acquisitions, and an aging U.S. population. In January, we sold certain names on relative strength to moderate our position size. We also initiated stakes in select companies to take advantage of attractive investment opportunities.

Team (As of 25-Feb-2021)

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
    2014
  • 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
    2014
  • Years at
    T. Rowe Price
    30
  • Years investment
    experience
    23
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 division 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 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.