Strategy
Investment Objective
In a single offering, this fund offers global diversification across asset classes and regions of the world, tactical views expressed through portfolio reallocations, and bottom up security selection to create an actively managed global portfolio. The fund can tactically overweight and underweight asset classes from their normal allocation. 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.
Investment Approach
- The Fund seeks long-term capital appreciation and income. The Fund blends active security selection and asset allocation positioning in a broadly diversified global portfolio of stocks, bonds, cash, and alternatives across sectors, regions, and market capitalizations.
- The Fund’s broad opportunity set includes developed and emerging market equities, a wide range of global developed and emerging market fixed income strategies across sectors and credit quality, plus various diversifying strategies providing exposure to hedge funds, currency hedging, real asset equities, and an equity index-option strategy.
- The Fund has the ability to utilize tactical asset allocation within defined ranges for each asset class or sector to potentially capitalize on a variety of global market environments.
- Sources of value added:
- Portfolio Design: Strategic allocation that is diversified across asset classes and sectors with low correlations to dampen volatility and includes investments that have the potential to enhance long-term returns.
- Tactical Asset Allocation: The Asset Allocation Committee makes tactical decisions to overweight or underweight asset classes and sectors based on a 6-18 month investment horizon.
- Fundamentally-Driven Security Selection: Underlying portfolio managers select individual securities leveraging the T. Rowe Price global research platform of approximately 200 fundamental equity and credit analysts.
- The Fund is subject to the unique risks of international investing, including unfavorable currency exchange rates and political or economic uncertainty abroad. To the extent the fund has investments in emerging market countries; it will be subject to abrupt and severe price declines. The portfolio’s investments in alternative investments and hedge funds are difficult to value and monitor when compared with more traditional investments, and may increase the fund’s liquidity risks. Diversification cannot assure a profit or protect against loss in a declining market. Derivatives are used in the fund for selective market exposures.
Portfolio Construction
- The Fund’s long-term strategic neutral asset allocation is 60% stocks, 30% bonds and cash, and 10% alternative investments and has an allocation to diversifying strategies seeking to enhance the risk and return profile of the portfolio through sources of less correlated returns and diversified sources of income.
- Approximately 40% of the Fund’s investments are in international stocks and bonds, representing both developed and emerging markets.
- An allocation to global equities is designed to capture the breadth of global investing opportunities with approximately 50% of the equity allocation in international equities.
- An allocation to global fixed income markets, with one-third in international bonds, designed to emphasize specific attributes that contribute to the overall portfolio across a range of economic environments.