T. Rowe Price Group, Inc. · NASDAQ:TROW
T. Rowe Price — Q2 2018 Earnings Presentation
18 slides from T. Rowe Price's earnings presentation, Jun 30, 2018
Slide 1: Asset Allocation Viewpoints and Global Investment Environment
T. Rowe Price ASSET ALLOCATION VIEWPOINTS AND GLOBAL INVESTMENT ENVIRONMENT Q2 2018 Past Performance is not indicative of future results.
Slide 2: Q2 2018 Global Environment
Q2 2018 Global Environment As of June 30, 2018 MAJOR Global Growth Global Earnings U.S. Economy Global Liquidity MARKET Momentum Strong But Receding Resilience vs. THEMES Peaking Expected to Fade Rest of World Narrow Equity Impacts of U.S. Stronger U.S. Flattening Yield Market Tax Reform / Dollar Cu
Slide 3: Stocks vs. Bonds
Stocks vs. Bonds As of June 30, 2018 We increased our underweight to equities as valuations remain elevated against a backdrop of receding global liquidity, higher rates, an aging U.S. economic cycle and rising trade tensions. While equity valuations have become less challenging recently, key factor
Slide 4: Regional Equity Positioning
Regional Equity Positioning As of June 30, 2018 We trimmed our overweight to developed markets outside the U.S. amidst signs of moderating growth. Other concerns include rising trade tensions and resurgence in political risk. However, valuations remain attractive relative to the U.S. and monetary po
Slide 5: U.S. Growth vs. U.S. Value
U.S. Growth vs. U.S. Value As of June 30, 2018 We remain neutral to growth stocks relative to value stocks. While we expect secular growth companies to continue to benefit in a low growth environment, valuations are less compelling as growth stocks have significantly outperformed value, led by a nar
Slide 6: International Growth vs. International Value
International Growth vs. International Value As of June 30, 2018 We reduced our overweight to value stocks outside the U.S. as catalysts for cyclical sectors to outperform have moderated along with growth expectations. Escalating trade wars, a resurgence in political uncertainty and weakness amongst
Slide 7: U.S. Large-Cap vs. Small-Cap
U.S. Large-Cap vs. Small-Cap As of June 30, 2018 We are overweight to U.S. small-cap stocks based on reasonable valuations versus large cap, potential benefits from lower corporate tax rates, a pickup in M&A (mergers and acquisitions) activity and growth in capital spending. Small caps are also less
Slide 8: International Large-Cap vs. International Small-Cap
International Large-Cap vs. International Small-Cap As of June 30, 2018 We are underweight Global ex-U.S. small-caps stocks, as relative valuations are less compelling. Global ex-U.S. small-caps may also be vulnerable to slower growth trends. MSCI EAFE (EUROPE, AUSTRALASIA GLOBAL PURCHASING MANAGERS
Slide 9: Emerging vs. Developed Markets Equity
Emerging (EM) vs. Developed Markets Equity As of June 30, 2018 We are neutral emerging markets stocks relative to developed market stocks. Emerging markets have recently come under pressure from trade war concerns, the strengthening U.S. dollar, and higher interest rates—resulting in more attractive
Slide 10: Global Equities vs. Real Assets Equities
Global Equities vs. Real Assets Equities As of June 30, 2018 We are underweight to real assets equities as we remain cautious on the prospects for energy and commodity prices, given continued concerns over supply and demand imbalances. TIPS BREAKEVEN SPREADS* AND INFLATION GLOBAL OIL DYNAMICS Januar
Slide 11: Global Fixed Income
Global Fixed Income As of June 30, 2018 Developed market sovereign yields remain at low levels, due to support from central bank quantitative easing. EM (Emerging Markets)and high yield credit sectors offer more attractive yield and lower duration. However, high yield credit spreads are tight relati
Slide 12: U.S. High Yield vs. U.S. Investment Grade
U.S High Yield vs. U.S. Investment Grade As of June 30, 2018 We increased our underweight to high yield bonds relative to U.S. investment grade bonds as valuations are trending well above historical averages. At the current prices, high yield offers limited opportunity for price appreciation and may
Slide 13: Emerging Markets Debt vs. U.S. Investment Grade
Emerging Markets (EM) Debt vs. U.S. Investment Grade As of June 30, 2018 We remain underweight emerging market-dollar bonds due to risks from rising developed market rates, escalating trade tensions, and idiosyncratic and political risks remain elevated in several key countries, including Mexico, Br
Slide 14: Non-Dollar Bonds vs. U.S. Investment Grade
Non-Dollar Bonds vs. U.S. Investment Grade As of June 30, 2018 We moderated our underweight to currency-hedged developed market bonds outside the U.S. as increasing short-term rate differential between U.S. and non-U.S. markets has led to more competitive hedged yields on bonds in Europe and Japan f
Slide 15: Important Information
Important Information 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. Thi
Slide 16: Glossary
Glossary Core Consumer Pricing Index (CPI): A method for measuring core inflation. It is the consumer price index (CPI) excluding energy and food prices. There are many other methods for calculating core inflation, but this is the most popular measurement. This method has become the most widely used
Slide 17: Glossary
Glossary MSCI Emerging Markets: Represents the performance of large- and mid-cap securities in 24 Emerging Markets Option-Adjusted Spread: Measurement of the spread of a fixed-income security rate and the risk-free rate of return, which is adjusted to take into account an embedded option. Purchasing
Slide 18: Thank You
THANK YOU. C190X2GWV Past Performance is not indicative of future results.