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Financial Intermediary / All Funds / European Equity Fund
Fund Range Documents

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.

The listed funds are not an exhaustive list of funds available. Visit www.funds.troweprice.com to see the full range of funds offered by T. Rowe Price, including those that consider environmental and social characteristics as part of their investment process.  For up to date information regarding any T. Rowe Price fund's investment strategy, please see the relevant fund KID and prospectus. 

SICAV
European Equity Fund
An actively managed, high-conviction, all-cap portfolio of around 50-80 of our best European stock ideas. We seek to invest in higher quality businesses at attractive valuations which we believe are being systematically underappreciated by the market. The fund is categorised as Article 8 under Sustainable Finance Disclosure Regulation (SFDR).
ISIN LU0285831334
View more information on risks
FACTSHEET
KID
SFDR DISCLOSURE
31-Jul-2024 - Tobias Mueller, Portfolio Manager,
While European equities have outperformed expectations this year, they face challenging conditions and increased volatility. Headline inflation has slowed, but the sluggish economy and the high cost of capital could make earnings estimates more vulnerable to downgrades. These factors have depressed valuations, even of high-quality companies, yet they also present us with opportunities.

Overview
Strategy
Fund Summary
We leverage our strong research team to identify companies with durable business models that we believe are positioned firmly on the right side of change, or those companies undergoing idiosyncratic changes which in our view will help deliver improving shareholder returns. Disciplined portfolio construction focuses on those stocks with the most compelling risk/reward profiles. 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.

31-Jul-2024 - Tobias Mueller, Portfolio Manager,
European shares ended higher in July, buoyed by generally positive corporate earnings and optimism about falling interest rates. Still, political jitters and escalating trade tensions between the European Union and China curbed the gains. At the portfolio level, health care, industrials and business services and materials were the bottom-performing sectors due to stock picking. In health care, our investment in a Danish multinational biopharmaceuticals company performed worst. The shares fell sharply on competition concerns after a rival drugmaker said an early-stage trial of its obesity drug yielded positive results. In addition, the latter company outperformed in the sector, which further eroded relative returns because we do not hold the stock. Conversely, our choice of securities in consumer discretionary and information technology was supportive. Our off-benchmark holding in a UK fast-food retailer was the best performer in consumer discretionary. The shares climbed after first-half results showed the company increased like-for-like sales despite poor weather and consumer uncertainty.
31-Dec-2018 - Dean Tenerelli, Portfolio Manager,

Attractively Valued Stocks Emerged as Market Retrenched

Attractive opportunities have emerged in the equity market retrenchment at the end of 2018. These conditions suit our investment approach as they allow us to buy strong high-quality businesses and to diversify the portfolio. We increased our positions most in defensive sectors, such as utilities and real estate, and reduced them in the more cyclical sectors. However, the decline in cyclicals did not deter us from assessing high-quality opportunities with durable earnings that emerged there. On balance, we are tending to find more attractive opportunities in companies that have a more defensive profile or where we believe the market misunderstands the fundamental outlook and unfairly penalizes the company. At the same time, we continue to seek a relatively balanced portfolio in terms of exposures to possible economic scenarios, so that our relative performance is not dependent on a particular "macro" environment.

We altered our positioning by:

  • Raising our exposure to utilities, now our largest overweight, initiating in Iberdrola
  • Moving to an overweight in real estate, adding Great Portland Estates
  • Reducing our underweight in materials, investing in Koningklijke DSM
  • Slimming our overweight in industrials and business services

Raised Exposure to Utilities, Now Biggest Overweight

We increased our exposure to utilities, which is now our biggest overweight. We are overweight in the gas and multi-utilities industries, where we hold Italian names Italgas, a natural gas distribution company, and Hera, a public utility company. We also hold Red Electrica, a partly state-owned and public limited Spanish corporation that operates Spain's national electricity grid.

  • We initiated an investment in Iberdrola, a Spain-based integrated utility company, taking advantage of weakness in the share price, which is driven by regulatory uncertainty. The company is attractively valued, provides a steady income stream, and should benefit over the longer term from its position in the decarbonized renewables and electricity transmission markets. It also has a potential pipeline of new assets extending beyond 2025.

Moved to Overweight in Real Estate

As we seek to maintain a balanced portfolio to counter the impact of market volatility, we raised our exposure to the real estate sector by adding UK office developer Great Portland Estates (GPOR). Our other investment is in Aedas Homes, a Spanish house builder with a large land bank.

  • We believe GPOR, which operates in central London, is undervalued by the market. The management team has an excellent track record, the balance sheet is strong, and the values of its office assets are being underestimated. We believe there is a high probability that GPOR will return capital to shareholders after a successful disposals program.

Reduced Underweight in Materials

We increased our allocation to materials, a sector that we have not favored largely because we did not like the business models of many companies within it. However, when opportunities to own high-quality companies arise, such as in the current market retrenchment, we are happy to invest in them. To this end, we opened a position in Koningklijke DSM, a leading vitamin maker and performance materials business.

We currently own France-based Air Liquide, a large international industrial gas company; Corbion, a Dutch biobased ingredients company operating in the food and biochemical sectors; and Johnson Matthey, a specialty chemicals company that is also the world's biggest auto catalyst maker.

  • We took advantage of share price weakness to invest in DSM. We believe the business is becoming more stable and focused on growth, thanks to the acquisition-driven transformation program. In our view, improving organic growth, an effective cost and capital efficiency program, and the end of the headwind of falling vitamin E prices should drive a share price recovery and outperformance.

Reduced Overweight in Industrials and Business Services

We reduced our overweight industrials and business services amid signs that the European economy is losing momentum, a less favorable environment for this cyclical sector.

We continued to adjust the composition of our holdings, taking advantage of the market decline to sell companies that have underperformed and invest in high-quality businesses with strong industry positions and durable earnings that are now more realistically valued.

We sold out of CNH Industrial, one of the world's largest capital good companies; Trelleborg, a Sweden-based engineering company that develops polymer sealing solutions and wheel systems; and Wolters Kluwer, a Dutch print and digital publisher, after a strong run.

In terms of industry, our largest weight is still professional services companies. We own Bureau Veritas, a France-based international certification agency, and Experian, the leading global provider of credit information with operations in 17 countries, and we swapped Wolters Kluwer for RELX, the world's leading publisher of science journals and a provider of risk assessments on transactions with retail customers. Electrical equipment and aerospace and defense are also overweights. In the former, our biggest position is Schneider Electric, a global specialist in energy management and automation. In the latter, we also hold Dassault Aviation, another French company.

  • We started investing in RELX because we believe the market underestimates the quality and sustainability of growth at the risk business, which provides one of the leading online identity verification tools. It should benefit from the recent acquisition of the ThreatMetrix, one of the leading electronic devices databases. We also believe the risks around the science publishing business are overdone.
  • We sold our position in CNH Industrial because slowing economic momentum and increasing uncertainty in the agricultural sector about the possible impact of tariffs and trade disruptions could further curb sales growth in the main divisions. We exited Trelleborg as signs of weakening demand and emerging risks in the automotive agricultural and industrials segments could, in our view, weigh further on the share price after a period of underperformance.

Maintained Health Care Overweight; Exited Fresenius

We have retained our overweight allocation to the health care sector amid the market uncertainty, which favors defensive sectors. We sold Fresenius, a provider of health care-related products and services, and sister company Fresenius Medical Care after both companies issued a second surprise profit warning in the space of two months. Neither company now expects net income growth in 2019.

We hold sizable positions in pharmaceuticals, with overweights in two Swiss companies, Roche Holding and Novartis, a manufacturer of health care and nutritional products. We also hold Getinge, an off-benchmark Swedish medical technology company with product areas such as surgery, intensive care, infection control, and patient handling.
31-Jan-2024 - Tobias Mueller, Portfolio Manager,
In this inflationary environment, we aim to hold companies that exhibit pricing power or that are outright inflation beneficiaries at reasonable multiples. We also maintain a modest defensive tilt due to continuing uncertainty. We increased our consumer discretionary exposure, which is still below the benchmark level, after initiating a position in a producer of luxury watches and jewellery. We expect the stock to rerate as its high-end brands drive organic growth above the industry level. We reduced our above-benchmark allocation to health care, exiting a Germany-based drug research company after unexpected management changes threw its turnaround strategy into question.

Past performance is not a reliable indicator of future performance.

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.

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.

Before deciding to invest in the fund, you should read the offering document/prospectus (including its investment objectives, policies and any risk warnings) which are available and may be obtained from any appointed distributors.

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.

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.  

Benchmark: Investors may use the benchmark to compare the fund’s performance. The benchmark has been selected because it is similar to the investment universe used by the investment manager and therefore acts as an appropriate comparator. The investment manager is not constrained by any country, sector and/or individual security weightings relative to the benchmark and has complete freedom to invest in securities that do not form part of the benchmark.

Disclosure on Vendor Indices can be found here.