T. Rowe Price Group, Inc. · NASDAQ:TROW
T. Rowe Price — Investor Presentation (March 2024)
21 slides from T. Rowe Price's investor presentation, March 2024
Slide 1: Opportunities in Value Investing
Join the conversation: LinkedIn: @TRowePriceUK #USEquities Introduction to the US Large-Cap Value Equity Strategy Opportunities in Value Investing Gabe Solomon, Portfolio Manager Caleb Fritz, CFA Portfolio Specialist FOR PROFESSIONAL CLIENTS ONLY. NOT FOR RETAIL DISTRIBUTION.
Slide 2: Volatile style rotations; similar performance
Volatile style rotations; similar performance Total Return of Russell 1000 Value Relative to Russell 1000 Growth Since Value Underperformance Relative to Growth Bottomed Using Total Returns 1 September 2020 to 29 March 2024 Total Return of Russell 1000 Value Relative to Russell 1000 Growth 145 Value
Slide 3: Favourable starting point for value
Favourable starting point for value Percentiles of Growth Premium to Value Forward Price-to-Earnings Ratio (weighted average) of Russell 1000 Growth Index divided by Russell 1000 Value Index December 1984 to 29 March 2024 (Monthly Observations) Late ‘90s 250% Tech Bubble Growth Valuation Premium to
Slide 4: U.S. Large-Cap Value: Large franchise; long heritage
U.S. Large-Cap Value: Large franchise; long heritage US Select Value Equity Non-U.S. Separate US Large-Cap Value Accounts Equity Strategy 0.3B USD 19.2B USD2 1,287.1M USD Non-U.S. Commingled Funds 1,212.4M USD Total US Large-cap U.S. Large-Cap Value Equity Value Strategy 115.6 Billion 19.2 Billion U
Slide 5: Gabe Solomon: US Large-Cap Value Lead Portfolio Manager
Gabe Solomon: US Large-Cap Value Lead Portfolio Manager As of 31 March 2024 21 19 7 years of years with years as Portfolio investment T. Rowe Price Manager of experience T. Rowe Price Financial Services Fund Lead Portfolio Manager US Large-Cap Value Equity Fund from 1 April 2022; Co-Portfolio manage
Slide 6: The US Large-Cap Value Equity Strategy Mission
The T. Rowe Price US Large-Cap Value Equity Strategy Mission The US Large Cap Value To accomplish our We construct a diversified Equity Strategy is a value objective, we leverage portfolio from the bottom portfolio that seeks to fundamental insights up with a keen focus on generate long-term through
Slide 7: Advantages of our approach
Advantages of our approach Extensive Research Capabilities We exploit market inefficiencies by Consistent Value Approach combining three features The outcome is consistency of style, characteristics, and Long-Term Investment Horizon performance We leverage fundamental insights with a disciplined val
Slide 8: Value distortions and investor psychology
Value distortions and investor psychology Market Value Intrinsic Value Share Price Potential Upside Overpriced from Corrective Action Controversy and Stress Can Create Mispricing due to: ▪ Company Misstep ▪ Secular Pressure ▪ Economic Cycle ▪ Management/Strategic Change Underpriced ▪ Terminal Value
Slide 9: Key elements of our investment approach
Key elements of our investment approach Valuation Fundamental Long-Term Diversification Appeal Insight Horizon Focus on relative value Fundamental research is A long-term orientation Diversified portfolios help to relationships to key to uncovering allows for the full manage the portfolio risk oppor
Slide 10: Narrow Markets Create Opportunities
Narrow Markets Create Opportunities Underappreciated Regional Banks with Oil Companies and Industrials on Right Artificial Intelligence Midwest Focus Services Side of Change Benefits of Artificial Intelligence are U.S. banks are attractively valued, Oil productivity peaking will create Companies ben
Slide 11: Portfolio Positioning
Portfolio Positioning As of 31 March 2024 T. Rowe Price Funds SICAV—US Large Cap Value Equity Fund Consumer Staples Top 10 positions % of Information Technology as at 31 March 2024 Industry Fund Health Care Qualcomm Semiconductors & Semiconductor Equipment 3.6% Energy Chubb Insurance 2.9% Utilities
Slide 12: Outlook for U.S. Equity Market
Outlook for U.S. Equity Market ▪ U.S. Economy has been resilient due to strong consumer and fiscal spending. ▪ An imminent recession appears unlikely, and any recession we get is likely to be short and shallow due to corporate balance sheet strength and a tight U.S. labor market ▪ Key risks for the
Slide 13: Appendix
Appendix T. R O W E P R I C E 13
Slide 14: Performance
Performance As of 31 March 2024. Figures are Calculated in U.S. Dollars T. Rowe Price Funds SICAV—US Large Cap Value Equity Fund Annualised Year-to- One Three Five Ten Fifteen Twenty Date Year Years Years Years Years Years SICAV US Large Cap Value Equity Fund - Class I (USD)† 9.04% 21.13% 7.33% 10.0
Slide 15: Performance
Performance As of 31 March 2024. Figures are Calculated in Great British Pound T. Rowe Price Funds OEIC—US Large Cap Value Equity Fund Annualised One Three Five Year-to-Date Year Years Years OEIC US Large Cap Value Equity Fund - Class C (GBP)† 9.22% 18.85% 10.70% 11.84% OEIC US Large Cap Value Equit
Slide 16: Value historically sensitive to interest rates
Value historically sensitive to interest rates U.S. Large-Cap Value and Growth Performance and Yields June 1926 to March 2024 (Monthly Observations) Recession U.S. Treasury 10-Year Yield Index (Value-Growth) 18% 1000 16% 900 Value Minus Growth Indexed 14% 800 700 12% 10-Year Yield 600 10% 500 8% 400
Slide 17: Value matters: consistent high growth is rare
Value matters: consistent high growth is rare January 1985 through March 2024, Russell 3000 Index EPS Growth Persistence: Percent of Companies Achieving Consecutive Years of EPS Growth Over +10% 60% 50% 50% Only 62 of 13,233 companies have posted >10% EPS growth for 10 consecutive years Percent of C
Slide 18: Value matters: expectations drive stock performance
Value matters: expectations drive stock performance 1990 - 2023 Russell 1000 Index: Realised Future EPS 5-Year Growth Forward 12-Month Excess Returns vs. Russell 1000 Index 16 1.5 14 1.0 12 12-Month Relative Return % 0.5 EPS 5-Year Growth % 10 0.0 8 -0.5 6 -1.0 4 2 -1.5 0 -2.0 High Q2 Q3 Q4 Low High
Slide 19: Funds SICAV― US Large-Cap Value Equity Fund: Objective and risks
T. Rowe Price Funds SICAV― US Large-Cap Value Equity Fund Objective and risks Objective To increase the value of its shares, over the long term, through growth in the value of its investments. Investment Process The fund is actively managed and invests mainly in a widely diversified portfolio of sha
Slide 20: Additional Disclosures
Additional Disclosures Compustat: Copyright © 2024, S&P Global Market Intelligence (and its affiliates, as applicable). Reproduction of any information, data or material, including ratings (“Content”) in any form is prohibited except with the prior written permission of the relevant party. Such part
Slide 21: Important Information
Important Information The SICAV 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 securit
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