Winnersrationale

The US equity market had a stellar performance in 2021, rallying more than 20% YTD as of the end of August. But another year of broad-based growth has meant that active managers are challenged to demonstrate their value and the capacity for long-term outperformance. As of 31 August 2021, the T. Rowe Price Funds SICAV – US Large Cap Growth Equity Fund had beaten its benchmark over a 5-year and 10-year period.

The fund strictly follows an investment process emphasising fundamental research with ESG integration and active, bottom-up stock selection. The fund’s strategy has remained consistent since its inception in November 2003. Within its portfolio of 65-75 US large cap growth stocks, the fund identifies opportunities beyond the better known mega-cap technology names, which keeps the concentration risks of the portfolio in check.

One of its major calls in the past year was in Snap Inc, the parent company of social media application Snapchat, which the fund believes has a more competitive business model than its peers and keeps innovating. Other attractive US companies in the fund’s investment universe fall outside the information technology sector. For instance, within the consumer discretionary sector, the fund recognised Carvana, a used car business, as having the potential to materially disrupt the US$800 billion used-car market in the US through its use of data and artificial intelligence in creating an online proposition for customers.

A carefully composed, back-tested stock selection process coupled with a discreet risk management process has allowed T. Rowe Price Funds SICAV – US Large Cap Growth Equity Fund to stand out among its peers. By the end of August 2021, the fund had delivered a return of 18. 21% after fees, with a Sharpe ratio of 1.38.

For its ability to consistently demonstrate the value of active management and bottom-up stock selection, T. Rowe Price has been selected as Asian Private Banker’s Best Fund Provider – US Equity for the year 2022.