Concentrated Global Equity Fund - Q3 Update

For our concentrated global equity strategy during the third quarter of 2024, it was a positive quarter for both absolute and relative returns.

In an absolute sense, in Australian dollars, the fund was up close to 4% and outperformed its benchmark by almost 1.3% after fees.

When we think about year to date, performance has also been very strong.

We've got absolute returns for the strategy and the fund a little bit more than 20%.

And then in a relative sense after fees, the fund year to date to September has outperformed by around 4%.

When we look at what drove these returns during the quarter, stock picking was a strong factor.

When we think about our exposures in healthcare, we have had key positions in bioprocessing which were particularly strong during the quarter.

Bioprocessing is effectively the company selling the tools to manufacture biopharmaceuticals which have been a little bit depressed following covid and the increased orders that took place.

Then when we also think about the Magnificent 7, our positioning and being underweight alphabet and overweight Meta alone added around half a percent of alpha (excess return) during the quarter.

And when we think about some key developments, top-down, the Fed rate cuts also added further boost to our positioning exposed to U.S. housing, where we would expect volumes to accelerate on lower rates.

And also China stimulus was a particular benefit for our Japanese companies that will benefit from increased Chinese demand.

Overall stock picking and some positioning were very strong.

But one additional particular data point is we did start to see some weakness creep into the tech space, which has been a very big driver of markets up until this quarter, with further concerns starting to rise around AI Capex spending, but also potential for Chinese demand, which has been very strong for some segments to start to be a little bit weaker.

Our caution in this segment was actually very beneficial and an underweight to some of the key tech hardware names also benefited the strategy.

Additional Information

All information is of 30 September 2024.

Past performance is not a reliable indicator of future performance.
Source for performance: T. Rowe Price.

Performance: Net-of-fees performance is based on end-of-month redemption prices after the deduction of fees and expenses and the reinvestment of all distributions. Figures include changes in principal value. Investment return and principal value will vary, and an account may be worth more or less at termination than at inception.

The 3-month, year-to-date, and since inception (15 December 2021) net returns as of 30 September 2024 were: 3.57%, 21.02%, and 10.01% p.a. for T. Rowe Price Concentrated Global Equity Fund - I Class (AUD); 3.48%, 20.78%, and 9.74% p.a. for T. Rowe Price Concentrated Global Equity Fund - S Class (AUD). See our website for further information.

Benchmark & Market defined as: MSCI World Index ex-Australia Net (unhedged) (AUD). Index returns are calculated with reinvestment of dividends after the deduction of withholding taxes.

The specific securities identified and described are for informational purposes only and do not represent recommendations or statement of opinion intended to influence a person or persons in making a decision in relation to investment. The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the portfolio, and no assumptions should be made that the securities identified and discussed were or will be profitable.

‘Magnificent Seven’ includes Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla.

AI Capex: Artificial Intelligence Capital Expenditure

Important Information

Equity Trustees Limited (“Equity Trustees”) (ABN: 46 004 031 298, AFSL: 240975), is the Responsible Entity for the T. Rowe Price Australian Unit Trusts ("the Fund").  Equity Trustees is a subsidiary of EQT Holdings Limited (ABN: 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).

This material has been prepared by T. Rowe Price Australia Limited ("TRPAU") (ABN: 13 620 668 895, AFSL: 503741) to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither TRPAU, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.

Past performance is not a reliable indicator of future performance. You should obtain a copy of the Product Disclosure Statement, which is available from Equity Trustees (www.eqt.com.au/insto) or TRPAU (www.troweprice.com.au/investor), before making a decision about whether to invest in the Fund named in this material.

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Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

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