Global Technology Equity Fund

Capital at risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

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Overview

Manager's Outlook

Global technology stocks faced pressure during the period as the market saw a continuation of the macro-driven-style headwinds in equity markets that have persisted since late 2021. The Federal Reserve's mid-June decision to raise interest rates by three-quarters of a percentage point, the most aggressive hike since 1994, also exacerbated fears that higher borrowing costs could tip the U.S. into a recession. As interest rates have increased, the market's duration has shortened, which hasn't boded well for long duration growth assets like technology stocks. In recent months, many technology companies, including several mega-cap stocks as well as technology companies that we don't own in the portfolio, missed quarterly earnings estimates and issued disappointing guidance as a result of difficult year-over-year comparables, which has further weighed on valuations within the technology space. At the end of June, the Nasdaq Composite remained in bear territory, while the MSCI All Country World Index Information Technology ended the month down more than 25% from the start of the year.

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As with many other areas of the market, demand distortions stemming from the coronavirus pandemic and recent supply chain issues have impacted our investment universe and challenged even some of the most seasoned management teams in our portfolio, such as Amazon.com. The scale of its business does not create immunity to these challenges; in fact, it could exaggerate it in the short term. However, many of the top holdings in the portfolio today have secular growth drivers that we think are durable, including digital transformation?in which we are participating through the public cloud providers?next-generation database companies, and infrastructure software companies. We maintain conviction in the fundamental growth profiles that our investments bring to the portfolio, and we are confident that the unique, long-term prospects of these firms will again be rewarded.

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We believe the market has more than discounted the possibility of greater interest rate hikes in the coming months as reflected in technology valuations that have corrected to pre-pandemic levels. Going forward, we think recessionary pressures will come from earnings revisions, as opposed to from multiple compression. We are starting to see estimate revisions, but so far these revisions have been isolated to semiconductors and the consumer. Our overweight allocation to enterprise software is a defensive position from a fundamental perspective. We have conviction of the underlying business models and profitability these companies have with established unit economics in a variety of economic scenarios.

Strategy

Fund Summary

Our fundamental company research and bottom-up analysis aims for early identification of disruptive technology trends and to identify future winners and losers of technological change. We invest in primarily mid- to large-sized companies with strong and/or increasing market share and product pipelines that appear to be strategically poised for long-term growth. The promotion of environmental and/or social characteristics is achieved through the fund's commitment to maintain at least 10% of the value of its portfolio invested in Sustainable Investments, as defined by the SFDR. Additionally, we apply a proprietary responsible screen (exclusion list). The manager is not constrained by the fund’s benchmark, which is used for performance comparison purposes only.

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

30-Jun-2024 - Dom Rizzo, Portfolio Manager,

Global equities were volatile in June but managed to eke out broadly positive results. Within the portfolio, stock selection in semiconductors detracted from relative performance. Our positioning in a large digital semiconductor company with a communications focus hurt. We did not own the stock at the beginning of the period and missed out on gains after the company reported better-than-expected results from its most recent quarter and announced a stock split. We initiated a position during the month as we like the company’s world-class application-specific integrated circuits and networking switch technology as well as its meaningfully improving fundamentals. Within internet, an overweight position dragged as the subsector trailed the benchmark. Alternatively, stock selection in industrials contributed to relative results. Shares of an electric vehicle manufacturer advanced after a prominent technology investor released financial models predicting that by 2029 the majority of the company’s earnings will be driven by its artificial intelligence-related endeavours. We believe structural cost, technology, and cultural advantages should enable the company to continue disrupting the automotive industry while it also diversifies into less cyclical and higher-margin areas such as energy storage and autonomous driving.

31-Dec-2023 - Dom Rizzo, Portfolio Manager,

Digital semiconductors companies are direct beneficiaries of artificial intelligence (AI); one major player in the space recently projected that the AI market could grow from USD 45 billion in 2023 to USD 400 billion by 2027 and could comprise a significant portion of the total semiconductor market size. We find this projection remarkable and believe it highlights significant opportunities for several of our investments. One of our largest holdings in semiconductors is a high-quality company solidifying a leadership position in its industry as the role of graphics processing units continues to gain importance amid several powerful vectors for growth: AI, supercomputing, gaming, and autonomous driving.

Benchmark Data Source: MSCI. MSCI index returns are shown with reinvestment of dividends after the deduction of withholding taxes. MSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

Past performance is not a reliable indicator of future performance.

Source for 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.

The Funds are sub-funds of the T. Rowe Price Funds SICAV, a Luxembourg investment company with variable capital which is registered with Commission de Surveillance du Secteur Financier and which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). Full details of the objectives, investment policies and risks are located in the prospectus which is available with the key investor information documents and/or key information document (KID) in English and in an official language of the jurisdictions in which the Funds are registered for public sale, together with the articles of incorporation and the annual and semi-annual reports (together “Fund Documents”). Any decision to invest should be made on the basis of the Fund Documents which are available free of charge from the local representative, local information/paying agent or from authorised distributors. They can also be found along with a summary of investor rights in English at www.troweprice.com. The Management Company reserves the right to terminate marketing arrangements.

Daily performance data is based on the latest available NAV.

Please note that the Fund typically has a risk of high volatility.

Hedged share classes (denoted by 'h') utilise investment techniques to mitigate currency risk between the underlying investment currency(ies) of the fund and the currency of the hedged share class. The costs of doing so will be borne by the share class and there is no guarantee that such hedging will be effective.

The specific securities identified and described in this website do not represent all of the securities purchased, sold, or recommended for the sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.

Attribution Data: Analysis represents the total performance of the portfolio as calculated by the FactSet attribution model and is inclusive of other assets that that will not receive a classification assignment in the detailed structure shown. Returns will not match official T. Rowe Price performance because FactSet uses different exchange rate sources and does not capture intra-day trading. Performance for each security is obtained in the local currency and, if necessary, is converted to U.S. dollars using an exchange rate determined by an independent third party. Figures are shown with gross dividends reinvested.

Sources: Copyright © 2020 FactSet Research Systems Inc. All rights reserved. Analysis by T. Rowe Price Associates, Inc. T. Rowe Price uses a custom structure for sector and industry reporting for this product.

A full list of the currently issued Share Classes including Distributing, Hedged, and Accumulating Categories may be obtained, free of charge and upon request, from the registered office of the Company.

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Risks

Typical Investor