T. Rowe Price Global Growth Equity Net Zero Transition 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.

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.

Overview

Manager's Outlook

The investment landscape?marked by extreme inflation, tightening financial conditions, slowing growth, decelerating corporate earnings, and continued geopolitical risks?remains challenging. We are operating in an environment of rapidly changing and powerful economic factors by focusing on our "core basics" of following a truly idiosyncratic, sector-balanced approach that leverages our extensive research platform to invest in what we believe are well-run, durable growth compounders?stocks that should provide a solid return outcome in a lower-growth environment with meaningfully reset valuations.

�

The ongoing conflict in Ukraine has led to extreme commodity price inflation that has rippled through the global economy, and COVID-related headwinds have continued to disrupt supply chains. Outside of China, the rest of the world has reopened, and the higher inflation that was once thought to be transitory is likely to remain higher for longer than we had thought. With central banks now laser focused on reigning in inflation, we are operating in a higher interest rate world with rising risks of a recession.

�

Despite near-term uncertainty, we believe the market environment is still positive for equities and growth in the medium and longer term. While recession has become a broadly consensus view, it would likely be one of the most telegraphed recessions in history, and we would expect it to be short lived. Even though we are clearly in a new rate environment with the Federal Reserve going at a steeper and quicker pace than we anticipated, real rates remain negative and should remain very low for the medium term, which would be supportive for global growth equities. We believe the sharp downturn in equities has also removed much of the fundamental excess valuation in many stocks, which should provide for more compelling opportunities.

�

We are cognizant of building the portfolio for tomorrow, rather than owning what has worked in the recent past. Despite the challenges of 2022, we have high conviction in our current positions with a strong enduring bias toward companies in highly attractive industries where dynamics such as low penetration and long runways will lead to high and sustained levels of growth. Extending our return horizon and thinking beyond the short-term market narrative have allowed us to be contrarian in the past and have contributed to our longer-term outperformance.

Strategy

Fund Summary

We seek to invest in high-quality, durable businesses with sustainable growth prospects. We look for companies in attractive industries with improving fundamentals and potential for above-average and sustainable rates of earnings growth, when we believe valuations offer us high conviction, upside potential. The promotion of environmental and social characteristics is achieved through the fund’s commitment to maintain at least 50% of the value of its portfolio invested in Sustainable Investments, while, at the same time, aiming for 100% of the value of the portfolio to have achieved the transition required to limit global warming to 1.5 degrees by 2050. The investment manager implements the following investment strategies: Net Zero Transition Framework, including engagement, sustainable investment exposure and application of a responsible exclusion screen. 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.

29-Feb-2020 - Scott Berg, Portfolio Manager,

Global equities tumbled in February as the continued spread of the coronavirus beyond China, with acute outbreaks in Italy, South Korea, and Iran, spurred fears of a global pandemic and slowing growth. Within the portfolio, information technology (IT) contributed the most to relative returns. Shares of video conferencing solutions firm Zoom Video spiked over the month. As the coronavirus outbreak continues to spread worldwide and businesses deploy contingency plans like working from home, Zoom’s video conferencing technology could become more in-demand, and other investors appeared to recognise this. We think Zoom Video has an outstanding product with better technology than competitors that can address a widespread pain point (unreliable video conferencing from work and home). Conversely, a combination of stock selection and an underweight to real estate modestly held back relative performance. Logistics distribution warehouse operator Prologis fell amid concerns that slowing global growth from the coronavirus outbreak could be a headwind for the firm’s business. We think Prologis represents a durable, long-term growth opportunity given its exposure to fast-growing markets like e-commerce. We also think the management team is top-notch and believe its ability to create a one-stop shop for organisations looking to build a national logistics network is underappreciated.

29-Feb-2020 - Scott Berg, Portfolio Manager,

We continue to believe that the pace of structural growth and innovation within the IT sector remains strong. Advancements in areas like artificial intelligence (AI) and enterprise software are not only affecting technology companies, but also reshaping more traditional industries once viewed as less susceptible to business model disruption. In our view, we remain positioned to benefit from increasing AI adoption and application as well as the ongoing transition toward greater computing mobility, increasing use of the Web, and growing technology consumption in emerging markets. As a result, our holdings are tilted toward payment and cloud software companies.

31-Mar-2022 - Scott Berg, Portfolio Manager,

We trimmed our position in discount broker Charles Schwab on strength. We continue to like Charles Schwab for its diverse business model compared with other discount brokers, its top-notch management, history of strong capital allocation, and leverage to rising interest rates. We also think the company is benefiting from capturing the synergies from its 2020 acquisition of TD Ameritrade.
We sold shares of U.S. regional bank Signature Bank. Near-term macroeconomic challenges like higher inflation and the possibility of slowing loan growth have reduced our outlook.
We bought shares of U.S. fast casual restaurant chain Chipotle Mexican Grill. We think Chipotle operates an attractive, non-franchise model with strong business economics, and we believe growth should accelerate as staffing returns to pre-COVID-19 levels and the company continues to expand store growth into smaller towns.
We bought shares of online travel agency Expedia. We think Expedia is a high-quality growth company that is well-positioned to benefit from travel demand normalization as the world continues to learn to live with COVID-19. We also believe the market underappreciates the company's in-house vacation rental business, VRBO, which has been resilient during the pandemic and stands to benefit further from the normalization in travel. Further, Expedia's ongoing overhaul of its cost structure should boost profitability.
We sold shares of Global Payments. Given the stock's strong recent run, we thought the company was more fairly valued, so we chose to reallocate funds to names with greater upside potential.
We sold shares of payroll and human capital management software company Paycom Software. We have higher conviction in Paylocity's ability to drive strong earnings growth over the long term, so we reallocated to Paylocity.
We bought shares of Nutrien, a leading global producer of agricultural fertilizer products like potash, nitrogen, and phosphate. Given the supply chain disruption as a result of the ongoing Russia-Ukraine conflict, we think demand for Nutrien's offerings will accelerate as the market looks for new capacity in potash and nitrogen. We also like Nutrien's retail crop inputs business, which we think could provide some stability and downside protection in an environment with heightened commodity price volatility.
We bought shares of chemical company Albemarle. We think Albemarle has the world's best (lowest-cost and most expandable) lithium assets and believe the company is well positioned to benefit over the long term from accelerating lithium demand as electric vehicles and other technology that relies on lithium batteries grows.

30-Jun-2022 - Scott Berg, Portfolio Manager,

Shares of Brazilian ominichannel retailer Magazine Luiza sank on disappointing earnings results, broader macro pressure in the Brazilian market, and generally bearish sentiment for consumer growth names and concerns about higher inflation's effects on retailers. While positive physical store sales and faster than anticipated normalization in gross profit margins surprised to the upside, these positive data points were overshadowed by higher financial expenses and soft-ecommerce results. We continue to think Magazine Luiza has a best-in-class management team and is a strong, durable grower capable of sustaining well above industry average growth in e-commerce and marketplace retail.
Shares of Snap plunged after the company lowered revenue guidance in late May as the macro environment deteriorated further and faster than management had anticipated, which has put downward pressure on advertiser budgets. However, we continue to have a positive view of the company longer term as engagement, user scale, product velocity, and innovative posture all show very positively despite the near-term economic headwinds.�
A position in chemical company Albemarle contributed to relative results as the stock moved higher after the company reported a sizeable earnings beat and raised full-year guidance driven by stronger lithium numbers. While lithium prices have experienced near-term outsized gains, we think we are on the cusp of a structural lithium upcycle driven by electric vehicle adoption hitting the S-curve and continue to appreciate Albemarle's position in the industry.

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.

Risks

Typical Investor