Future of Finance Equity Fund

Capital en riesgo. El rendimiento pasado no es un indicador fiable de los resultados actuales o futuros y no debe ser el único factor a tener en cuenta a la hora de seleccionar un producto o una estrategia.

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Descripción general

Manager's Outlook

We believe frontier markets have a natural place in an investor's global portfolio considering the long-term fundamentals and low correlation to other equity indexes. The macro fundamentals and demographics in many frontier markets today are favorable, and these economies have the potential to grow much faster than those in the developed and emerging markets universes. While the current global crisis brings investment opportunities, and the long-term growth outlook of many companies remains underpriced, we acknowledge that there will be individual winners and losers. Careful stock picking is therefore key and forms the core of everything we pursue.

In frontier Asia, we remain optimistic on the outlook for Vietnam. Following a challenging period with the coronavirus omicron variant and restrictive containment measures, we are pleased to see a catch-up in the vaccination rate and improving consumer sentiment on the ground. We believe that the country offers a very attractive long-term opportunity and find many compelling bottom-up ideas across sectors. Our holdings are focused on those companies that we believe are most able to execute well and benefit from the economy's strong structural growth potential.

We have become more optimistic on the outlook for Bangladesh following the loan program request it is working on with the IMF. This is due to the effects of rising inflation and declining foreign reserves on the country. We believe that the economy is well positioned for growth, and we are able to find companies with favorable valuations.

In frontier emerging market Pakistan, we are keeping a close eye on macroeconomics and geopolitics, particularly given the country's twin deficits, rising inflation, and currency depreciation. However, the government has agreed to tough adjustments in order to secure a USD 6 billion bailout package from the IMF. We focus on high-conviction ideas with strong bottom-up fundamentals, which are predominantly export businesses (meaning that they, in fact, benefit from currency weakness).

In Africa, Nigeria remains uninvestable despite the oil price, largely due to the strict capital controls that are in place. The equity market in Kenya is dominated by Safaricom, a large fintech provider, which was able to grow its services before and during the pandemic. We are concerned about the authorities' management of the economy and the currency.

In frontier emerging market Egypt, we are worried about the near term given the global forces at play. The economy is particularly vulnerable to the impacts of Russia's invasion of Ukraine. However, support from the IMF and select Gulf states should help the country to weather this challenging period.

Rentabilidad (después de comisiones)

30-nov.-2022 - Johannes Loefstrand, Gestor de carteras,

Frontier equities delivered strong returns in November, rising alongside the broader emerging market universe and their developed markets peers. In terms of the portfolio, our choice of securities within real estate and communication services, and our underweight exposures to both of these sectors was beneficial to relative performance. Our stock picks in materials also boosted portfolio returns. Shares in a precious and base metals developer, for example, gained ground on indications that it is making strong progress with construction of the Vares silver project in Bosnia and Herzegovina. Conversely, our stock selection in Vietnam was a net drag on relative performance. This was due in large part to the position in a retailer of consumer electronics and home appliances. Its shares sold off sharply following a profit warning that reflected very weak discretionary spending, higher financing costs, and the grocery business taking longer than expected to reach profitability. We believe that once the company moves beyond the cyclical issues in the electronic business, its new food retail stores are well-placed to continue taking market share from traditional wet markets on a national scale.

30-sept.-2022 - Johannes Loefstrand, Gestor de carteras,

In the third quarter, most frontier markets experienced significant volatility and at times this was indiscriminate, with investors not taking into account underlying fundamentals. As a result, this led to what we believed to be attractive valuations, and we took the opportunity to add to our positions. In our view, frontier markets are home to many companies that offer attractive idiosyncratic "stories" or investment cases that are uncorrelated with market movements and trends; these can be powerful in the current volatile market environment. At the same time, we trimmed positions where we felt valuations had become stretched following a strong run in the share price or where we believed investment conditions had deteriorated.

As of the end of the review period, the portfolio's main country relative overweight positions included Vietnam, Kazakhstan, and, to a lesser extent, Pakistan. In the latter, we are positioned in exporters, which are benefiting from the weaker currency. Meanwhile, the main underweight positions were in Nigeria, Kenya, Iceland, and Oman.

Vietnam

We retain the view that the macroeconomic fundamentals in Vietnam are still intact, and longer term, we believe the anti-corruption campaign will be beneficial to Vietnam's development and maturation as an investment market. The authorities there have estimated that GDP growth was 13.6% in the third quarter of 2022, and the International Monetary Fund (IMF) recently updated its growth forecasts to 7% for 2022 as a whole, the highest rate among major Asian economies. At the same time, inflation remains reasonably benign at around 3%?4%. Similarly, companies are reporting generally good operational momentum and guidance and the government has plans to stimulate the economy in 2023.

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Vietnam remains a large country position in the portfolio, on both an absolute and a relative basis, and we further raised our exposure over the quarter. We felt that the recent market weakness had led some stocks to trade at very attractive valuations. We remain mindful, however, of valuations in some specific stocks that have done very well year-to-date and, therefore, trimmed certain positions.

We topped up our position in Vietnam Engine and Agricultural Machinery, a manufacturer of agricultural machines and a minority shareholder in several large multinational auto and motorcycle manufacturers. The company has a secured dividend yield, and its share price tends to be uncorrelated with that of other Vietnamese stocks. In our view, the company is inefficiently priced by the market and its current valuation does not reflect the strong earnings growth we expect over the next six to 18 months.
We added to our existing holding in Vietnam Dairy Products. We believe this consumer staples company will see earnings growth inflecting positively in the next 12 months, while the valuation remains at highly attractive levels.
We initiated a small position in FPT Digital Retail. The electronics retailer has been launching a very successful pharmacy chain, and we think it will be one of the winners in this space. The company currently has around 800 stores (with plans to have 3,000 by 2026), and we believe that by 2024 its pharmacy could make up more than half of sales.
We increased the size of our position in Khang Dien House. The real estate developer caters to Vietnam's growing middle and upper classes. We believe this is a high-quality developer with good corporate governance. The sector has recently significantly underperformed the market, and we took the opportunity to narrow the extent of our underweight positioning.
We booked some profits in Saigon Beer Alcohol Beverage (Sabeco). Our investment thesis, namely that the company is taking market share from rival Heineken, is playing out, and this remains a high-conviction name. However, the relative valuation is less attractive following the recent strong share price performance.

Pakistan

The portfolio is overweight Pakistan as we see a number of compelling investment opportunities in this frontier market. However, over the quarter, we reduced our position, largely for bottom-up stock-specific reasons. As mentioned above, we are mindful of managing portfolio position sizes in cases where share prices have been significant.

We took profits in TRG Pakistan, trimming our holding on valuation grounds. Having become oversold earlier this year, the stock undertook a reverse rally in the third quarter, and we believe there is limited upside from here in the near term. We still retain an off-benchmark position as we believe that the company provides exposure to areas that are likely to benefit from increasing outsourcing, such as artificial intelligence customer-focused support functions, digital marketing, and customer care businesses.

Kenya

Over the course of the quarter, we moved further underweight in Kenya. We believe the macroeconomic environment in the country is unfavorable for investors.

We further trimmed our holding in Safaricom, the leading mobile operator in Kenya. We still have a high conviction in the name; however, we have concerns about the fragile macro environment and capital controls in Kenya and Ethiopia.

Bahrain

Over the course of the third quarter of 2022 we raised our exposure to this market, ending the period with a broadly neutral benchmark weighting.

We closed the underweight to regional bank Ahli United Bank, in Bahrain, in the lead-up to its merger with Kuwait Finance House. The date for the finalization of the merger was set for October 2, at which point the position would be eliminated.
We increased the size of our position in Aluminium Bahrain (Alba), one of the world's largest aluminum smelters outside of China. In our view, this is a good asset that is materially undervalued. We believe that the commodity has the potential to surprise on the upside and that there is a good risk/reward trade-off here. A potential cross-listing in Saudi Arabia is likely to serve as a catalyst to close the valuation gap to regional peers.

IT

We trimmed our exposure to U.S.-listed technology names Globant and Endava. Both stocks were trading at quite elevated valuations, and we did not see significant further upside in the near term. We took advantage of the strong bounce in growth names in August.

Slovenia

We trimmed our existing holding in Nova Ljubljanska Banka, the dominant banking and financial group in Slovenia, which also operates in some neighboring countries in southeastern Europe. Although we continue to like the name, we believe financials, particularly those in Eastern Europe, will struggle in a recessionary environment.

30-nov.-2022 - Johannes Loefstrand, Gestor de carteras,

As of the end of November, the portfolio’s most significant sector overweight positions were in information technology and consumer discretionary, with underweight exposures in real estate, communications services, and energy. In recent months we have been trimming positions where we felt valuations had become stretched following a strong run in the share price or where we believed investment conditions had deteriorated.

30-nov.-2022 - Johannes Loefstrand, Gestor de carteras,

While our recent research trip to Vietnam confirmed that a cyclical downturn is undoubtedly unfolding there, we are of the view that the public and private sectors are better placed than in past downturns to weather this storm. While certain developers have been poorly governed and leveraged excessively, most of the property market and private banks have been reasonably prudent. Most companies that we met with are bracing themselves for a worsening economic backdrop by tightening their belts and deleveraging. In our view, compelling valuations are in general more than offsetting the cyclical downturn.

30-sept.-2022 - Johannes Loefstrand, Gestor de carteras,

We topped up our position in Vietnam Engine and Agricultural Machinery, a manufacturer of agricultural machines and a minority shareholder in several large multinational auto and motorcycle manufacturers. The company has a secured dividend yield, and its share price tends to be uncorrelated with that of other Vietnamese stocks. In our view, the company is inefficiently priced by the market and its current valuation does not reflect the strong earnings growth we expect over the next six to 18 months.
We added to our existing holding in Vietnam Dairy Products. We believe this consumer staples company will see earnings growth inflecting positively in the next 12 months, while the valuation remains at highly attractive levels.
We initiated a small position in FPT Digital Retail. The electronics retailer has been launching a very successful pharmacy chain, and we think it will be one of the winners in this space. The company currently has around 800 stores (with plans to have 3,000 by 2026), and we believe that by 2024 its pharmacy could make up more than half of sales.
We increased the size of our position in Khang Dien House. The real estate developer caters to Vietnam's growing middle and upper classes. We believe this is a high-quality developer with good corporate governance. The sector has recently significantly underperformed the market, and we took the opportunity to narrow the extent of our underweight positioning.
We booked some profits in Saigon Beer Alcohol Beverage (Sabeco). Our investment thesis, namely that the company is taking market share from rival Heineken, is playing out, and this remains a high-conviction name. However, the relative valuation is less attractive following the recent strong share price performance.
We took profits in TRG Pakistan, trimming our holding on valuation grounds. Having become oversold earlier this year, the stock undertook a reverse rally in the third quarter, and we believe there is limited upside from here in the near term. We still retain an off-benchmark position as we believe that the company provides exposure to areas that are likely to benefit from increasing outsourcing, such as artificial intelligence customer-focused support functions, digital marketing, and customer care businesses.
We further trimmed our holding in Safaricom, the leading mobile operator in Kenya. We still have a high conviction in the name; however, we have concerns about the fragile macro environment and capital controls in Kenya and Ethiopia.
We closed the underweight to regional bank Ahli United Bank, in Bahrain, in the lead-up to its merger with Kuwait Finance House. The date for the finalization of the merger was set for October 2, at which point the position would be eliminated.
We increased the size of our position in Aluminium Bahrain (Alba), one of the world's largest aluminum smelters outside of China. In our view, this is a good asset that is materially undervalued. We believe that the commodity has the potential to surprise on the upside and that there is a good risk/reward trade-off here. A potential cross-listing in Saudi Arabia is likely to serve as a catalyst to close the valuation gap to regional peers.

30-sept.-2022 - Johannes Loefstrand, Gestor de carteras,

Shares in fintech group Kaspi fell sharply early in the third quarter, largely due to growing risk aversion at a global level. We felt that sentiment toward the name had become too pessimistic and took the opportunity to add meaningfully to our position. The shares subsequently recovered, producing a very strong return for the quarter as a whole.
Halyk Savings Bank of Kazakhstan was another contributor to relative performance, with investors encouraged by robust strong quarterly results and significantly increased 2022 guidance. Our recent meeting with the bank confirmed our investment thesis: The bank has a high, sustainable return on equity, and given its new dividend payout policy of 50?100% of net income, we believe there is a relatively high chance that dividends will be reinstated in the second half of 2022 and beyond, as the outlook for the full year becomes more visible.
In particular, our holding in Hightech Payment Systems worked in our favor. The global payments software company is Morocco-based but has strong market shares in several African markets and a growing presence in Asia and Europe. Investors were greatly encouraged by an upbeat trading statement, which highlighted a strong increase in recurring revenues and a confirmed upward trend for payment activity.
Venture capital company TRG Pakistan was a significant relative contributor. Its shares rose strongly over the review period on the back of expectations of dividends and share buybacks as well as a depreciating rupee.
Systems was another source of strength over the quarter. Shares in the information technology (IT) services company surged on robust corporate results, driven by high growth in both topline growth and profits.
Shares in our off-benchmark position in jewelry producer and retailer Phu Nhuan Jewelry fell sharply following strong share price performance earlier in the year and despite delivering a solid trading update that highlighted "impressive" growth in the first eight months of 2022.
Similarly, our holding in Mobile World Investment (also known as MWG) hindered the portfolio's performance as investors reacted negatively as it was caught up in the broader sell-off. We believe that in the longer term, MWG's new food retail stores are well-placed to continue taking market share from traditional wet markets on a national scale, whilst it is on the cusp of generating profits after years of heavy investments in store roll-outs and distribution centers.
Shares of Converge Information and Communication Technology Solutions fell sharply, hindering portfolio performance. Sentiment toward the Philippines-based broadband service provider was dented by worse-than-expected quarterly results and lowered guidance for both revenue growth and its residential subscriber base target. Longer term, we believe Converge has the potential to be a market share gainer in a two-player telecommunications market, while the penetration of fixed broadband in the Philippines is one of the lowest in the region and the competitive environment.
In the case of Australia-listed online marketplace Frontier Digital Ventures (FDV) the stock was caught in the broader small cap and tech sell-off. However, recent results are encouraging and are pointing to sharp inflection in profitability, while sales growth remain potent.

Fuente de datos de índice de referencia: MSCI. MSCI no formula declaraciones ni garantías, expresas o implícitas, y declina toda responsabilidad con respecto a cualesquiera datos de MSCI incluidos en este documento. Los datos de MSCI no podrán redistribuirse ni utilizarse de forma ulterior como fundamento para otros índices o cualesquiera valores o productos financieros. Este informe no ha sido autorizado, revisado ni elaborado por MSCI.

Fuente de rentabilidad: T. Rowe Price. La rentabilidad del fondo se calcula utilizando el valor liquidativo oficial con reinversión de dividendos, en su caso. El valor de una inversión y de cualquier renta que genere puede bajar al igual que subir. Los inversores podrían no recuperar el importe invertido. Se verá afectado por los cambios en el tipo de cambio entre la divisa base del fondo y la divisa de suscripción, si es diferente. Las comisiones de suscripción (hasta un máximo del 5% para la Clase A), impuestos y demás costes locales no se han deducido y en su caso se reducirán de las cifras de rentabilidad.
La rentabilidad pasada no es un indicador fiable de rendimiento futuro.
Los índices que se muestran no son índices de referencia formales. Se muestran únicamente a efectos comparativos.

Los datos de rentabilidad diaria se basan en el valor liquidativo disponible más reciente.

Los Fondos son subfondos del T. Rowe Price Funds SICAV, una sociedad de inversión de Luxemburgo con capital variable que está registrada ante la Commission de Surveillance du Secteur Financier, habilitada como organismo de inversión colectiva en valores mobiliarios (undertaking for collective investment in transferable securities, UCITS). Los detalles completos de los objetivos, las políticas y los riesgos de inversión se encuentran en el folleto que está disponible con los documentos de información clave en inglés y en una lengua oficial de las jurisdicciones en las que los Fondos estén registrados para la venta pública, junto con los estatutos y los informes semestrales y anuales (de manera conjunta, los «Documentos del fondo»). Toda decisión de invertir deberá basarse en los Documentos del Fondo, que pueden obtenerse de forma gratuita del representante local, el agente de información/agente de pagos local o los distribuidores autorizados. También se puede acceder a estos documentos así como a un resumen en inglés de los derechos de los inversores en www.troweprice.com. La sociedad gestora se reserva el derecho de rescindir los acuerdos de comercializacion.

La rentabilidad del fondo tiene un riesgo de alta volatilidad.

Las clases de acciones cubiertas (denotadas por 'h') utilizan técnicas de inversión para mitigar el riesgo de divisa entre la divisa o divisas de inversión subyacentes del Fondo y la divisa de la clase de acciones cubierta. Los costes de hacerlo serán soportados por la clase de acciones y no existe garantía de que dicha cobertura sea efectiva.

Los títulos específicos identificados y descritos en este informe no representan todos los títulos comprados, vendidos o recomendados para el subfondo SICAV y no se deben realizar suposiciones respecto a que los títulos identificados y analizados registraron o registrarán rentabilidad.

Atribución: El análisis representa la rentabilidad total de la cartera, calculada según el modelo de atribución de FactSet, e incluye otros activos a los cuales no se asigna ninguna clasificación en la estructura detallada que se muestra aquí. Las rentabilidades no coincidirán con la rentabilidad oficial de T. Rowe Price, porque FactSet utiliza diferentes fuentes de tipos de cambio y no recoge la negociación intradía. La rentabilidad de cada título se obtiene en la divisa local y, en caso necesario, se convierte en dólares estadounidenses utilizando un tipo de cambio determinado por un tercero independiente. Las cifras se muestran con los dividendos brutos reinvertidos.

Fuentes: Copyright © 2024 FactSet Research Systems Inc. Todos los derechos reservados. Sectores MSCI/S&P GICS; Análisis llevado a cabo por T. Rowe Price Associates, Inc. T. Rowe Price utiliza el estándar de clasificación sectorial global (GICS) de MSCI/S&P para la comunicación de información sectorial e industrial. Cada año, MSCI y S&P efectúan cambios en la estructura de GICS. El último cambio tuvo lugar el 28 de septiembre de 2018. T. Rowe Price se ajustará a todos los cambios futuros del GICS para sus futuras comunicaciones.

Se puede obtener una lista completa de las clases de acciones emitidas actualmente, incluyendo las categorías de distribución, con cobertura y acumulación, de forma gratuita y previa solicitud, en el domicilio social de la Sociedad.

©2024 Morningstar, Inc. Todos los derechos reservados. La información que aquí se recoge: (1) es propiedad de Morningstar y/o sus proveedores de contenido, (2) no puede copiarse ni distribuirse y (3) no se ofrecen garantías de que sea precisa e íntegra ni de que se halle actualizada. Morningstar y sus proveedores de contenidos no asumen responsabilidad alguna por cualesquiera daños y pérdidas que pudieran derivarse del uso de esta información.

Citywire - en el caso de que el gestor del fondo esté calificado por Citywire, la calificación se basa en la rentabilidad ajustada al riesgo durante 3 años.

Vietnam

Pakistan

Kenya

Bahrain

IT

Slovenia

Riesgos

Typical Investor