Global Equity Fund - Q3 Update

From what was a very eventful and volatile third quarter of 2024, we saw the T. Rowe Price Global Equity Fund behind its benchmark by around 1.16% for that quarter.

This follows a year to date result which has seen very strong stock picking.

So looking at 2024 so far, the fund is still up close to 19% in absolute terms and outperforming its index after fees by close to 1.3%.

During the quarter though, it was some of our sector positioning, despite being relatively sector neutral that held back returns.

And this is because we saw very distinct leadership from value sectors and also some defensive sectors

So real estate and utilities were the strongest outperformers across the market by far and that did hold back returns as well, but also some of our temporary stock picking.

So in industrials, we had one of our key positions have one of their underlying businesses shut down during the quarter, which just hurt cash flow temporary, but doesn't change the long term story.

And also our second worst sector in terms of negative detraction was actually in healthcare.

Notably our two key positions in Novo Nordisk and Eli Lilly taking a bit of a breather after a very strong rally being exposed to GLP1 weight loss drugs primarily.

When we think about the positive side of things, there was a very distinct change in outperformance from emerging markets.

And as we have been quite positive on that region, notably across Southeast Asia, it was very encouraging that as developed markets underperformed changing what has been a long-term leadership dynamic.

Seven of our 10 best performing stocks in terms of contribute contributing to relative returns were actually from emerging markets.

Going forward, it is still just like for everyone in the equity market, all eyes on the US presidential election.

But in general we do observe the backdrop is one that still deserves a little bit of caution.

So while we see the backdrop still being quite positive economically for earnings from here, we do observe geopolitically and just in terms of still the inflation and rates backdrop means that we want to run a beta close to 1.0 and be quite diversified in our positioning while still stop picking within that.

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 5-year net returns as of 30 September 2024 were: 1.39%, 18.06%, and 11.29% p.a. for T. Rowe Price Global Equity Fund - I Class (AUD); 1.31%, 17.72%, and 10.98% p.a. for T. Rowe Price Global Equity Fund - S Class (AUD). See our website for further information.

Benchmark & Market: Benchmark for the Fund is MSCI All Country World Index ex-Australia Net (unhedged). Benchmark returns shown with reinvestment of dividends after the deduction of withholding taxes. Global Equities defined as MSCI All Country World Index.

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.

Beta: Beta measures the volatility of a security or portfolio relative to an index. A beta of less than one means lower volatility than the index; more than 1 means greater volatility.

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.

The Fund’s Target Market Determination is available here https://www.eqt.com.au/corporates-and-fund-managers/fund-managers/institutional-funds/institutional-fund-manager?f=1e68c659-e0db-4d2f-8a96-c436f3d60971. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.

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.

© 2024 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/ or apart, trademarks of T. Rowe Price Group, Inc.

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