Dynamic Global Bond Fund

Transcription

1 STRATEGY HIGHLIGHTS Dynamic Global Bond Fund Total Global Fixed Income Assets: $29.6 billion 2 Total Dynamic Global Bond Assets: 1 $7,328.9 million 2 Total Fund Assets: $2,170.4 million 2 As of March 31, 2018 INVESTMENT APPROACH The Dynamic Global Bond Fund seeks to provide attractive, stable income and downside risk management through dynamic and flexible portfolio management. The strategy is not benchmark sensitive and invests in fixed income securities from a broad opportunity set, looking for best opportunities but also for defensive investments to manage downside risk. Seeks to generate consistent and sustainable income Global reach for better income potential Importance of downside risk and risk management during all stages of portfolio construction Focus on diversified performance away from equity market volatility Target value added: seeks to outperform the U.S. 3 month Libor over a full market cycle Target volatility: between 2% and 5% annualized The Dynamic Global Bond Fund is subject to the risk that rising interest rates will cause bond prices to fall. The fund is nondiversified so its share price can be expected to fluctuate more than that of a diversified fund. Investments in foreign bonds are subject to special risks, including potentially adverse overseas political and economic developments, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar. Investments in emerging markets are subject to the risk of abrupt and severe price declines. High-yield bonds carry higher credit and liquidity risks than higher-rated bonds, meaning there is a greater chance they will have their credit ratings downgraded or default. The fund s use of derivatives may expose it to additional volatility in comparison to investing directly in bonds and other debt securities. PORTFOLIO CONSTRUCTION Total duration between -1 and 6 years Ability to go long and short individual countries and currencies Up to 100% allowed in government bond securities Up to 75% allowed in investment grade credit Up to 30% allowed in High Yield/Loans Up to 5% allowed in equity securities bonds and other debt securities PORTFOLIO MANAGEMENT Arif Husain, CFA Lead Portfolio Manager 22 years of investment experience; 4 years with T. Rowe Price. B.Sc., Cass Business School, City University London PORTFOLIO SPECIALISTS Stephane Fertat, CFA 20 years of investment experience; 10 years with T. Rowe Price. Masters in Finance, Ecole Superieure de Commerce de Paris Terry A. Moore, CFA 22 years of investment experience; 8 years with T. Rowe Price. M.B.A., Duke University, The Fuqua School of Business B.A., University of North Carolina at Chapel Hill For a complete list of the members of the fund s Investment Advisory Committee, please refer to the fund s prospectus. T. Rowe Price Investment Services, Inc., Distributor. BENCHMARK 3 Month LIBOR in USD 1 Includes a U.S.-registered mutual fund, a sub-fund of a Luxembourg domiciled SICAV, a Unit Investment Trust, and separate accounts. 2 Assets reported are as of December 31, 2017 and were current on date of production. Effective 20 June 2017, the Global Unconstrained Bond Fund was renamed the Dynamic Global Bond Fund. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 1

2 PORTFOLIO CHARACTERISTICS Fund Weighted Average Effective Duration 0.43 years Spread Duration years 1 Number of Holdings 114 Number of Countries 35 Number of Currencies 22 1 This calculation excludes the impact of Treasuries, futures and FX holdings. SECTOR DIVERSIFICATION (BEFORE HEDGING) Securitized 7.1% Cash & Cash Equivalents 12.7% Corporate (including High Yield) 13.5% Agency 1.6% Treasury & Quasi Treasury 65.2% Numbers may not total due to rounding. Source: T. Rowe Price. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 2

3 CURRENCY EXPOSURE Region Currency Exposure Dollar Bloc United States dollar 105.7% Australian dollar -4.0 Canadian dollar -5.0 Europe Bloc Euro 2.6 Romanian leu 2.0 Serbian dinar 0.8 British pound -2.0 Asia Bloc Indian rupee 1.8 Japanese yen 1.0 Chinese renminbi 0.4 Taiwanese dollar -3.0 South Korean won -3.0 Latin America Bloc Argentinian peso 1.0 Brazilian real 0.5 Africa/Middle East Bloc Egyptian pound 1.3 Total 100.0% DURATION CONTRIBUTION Region Country Contribution to Duration (Years) Australia 0.30 yrs Mexico 0.10 United States Dollar Bloc Sub Total Sweden 0.24 United Kingdom 0.23 Serbia 0.03 Czech Republic Hungary Poland Eurozone Italy Germany Cyprus 0.15 Others 0.12 Europe Bloc Sub Total Thailand 0.35 Malaysia 0.31 South Korea 0.15 India 0.03 Philippines 0.02 Hong Kong Asia Bloc Sub Total 0.65 Israel 0.30 Middle East/Africa Bloc Sub Total 0.30 Brazil 0.20 Chile 0.20 Latin America Sub Total 0.41 Total 0.43 yrs Numbers may not total due to rounding. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 3

4 TOP 10 ISSUERS % of Fund USA 10.0 Australia 9.8 Israel 7.6 Malaysia 6.6 Nordea Bank 5.5 Chile 5.1 United Kingdom 3.8 South Korea 3.6 Cyprus 3.5 Brazil 3.5 The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for the SICAV sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 4

5 PERFORMANCE Annualized Three Months One Year Three Years Since Inception 1/22/15 Dynamic Global Bond Fund 0.63% 0.11% 2.53% 2.28% 3 Month LIBOR in USD Lipper Alternative Global Macro Funds Index Lipper Alternative Global Macro Funds Average Morningstar Nontraditional Bond Category Current performance may be higher or lower than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary, and you may have a gain or loss when you sell your shares. To obtain the most recent month-end performance, please call or go to troweprice.com. Call to request a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. The fund s gross and net expense ratios as reported in the most recent prospectus were 1.16% and 0.65%, respectively. The fund operates under a 0.75% contractual expense limitation that expires on April 30, The fund operated below its expense limitation due to the waiver of fund-level expenses resulting from other class' expense limitations. The Dynamic Global Bond Fund is subject to the risk that rising interest rates will cause bond prices to fall. The fund is nondiversified so its share price can be expected to fluctuate more than that of a diversified fund. Investments in foreign bonds are subject to special risks, including potentially adverse overseas political and economic developments, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar. Investments in emerging markets are subject to the risk of abrupt and severe price declines. High-yield bonds carry higher credit and liquidity risks than higher-rated bonds, meaning there is a greater chance they will have their credit ratings downgraded or default. The fund s use of derivatives may expose it to additional volatility in comparison to investing directly in bonds and other debt securities. Derivatives can be illiquid and difficult to value, may involve leverage so that small changes produce disproportionate losses for the fund, and any instruments not traded on an exchange are subject to counterparty risk. The fund s principal use of derivatives involves the risk that interest rate movements, changes in currency values and exchange rates, or the creditworthiness of an issuer will not be accurately predicted, which could significantly harm performance and impair efforts to reduce overall volatility. Figures include changes in principal value, reinvested dividends, and capital gain distributions. Source for Lipper data: Lipper, Inc. T. Rowe Price Investment Services, Inc., Distributor. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 5

6 ADDITIONAL DISCLOSURES Portfolio Construction: There is no guarantee that the investment will remain within the anticipated ranges of exposure. Weighted Average Maturity is an average of the maturities of the underlying bonds, with each bond s maturity weighted by the percentage of fund assets it represents. Weighted Average Effective Duration is a calculation that seeks to measure the price sensitivity of a bond fund to changes in interest rates. In general, the longer the average maturity or duration, the greater the fund s sensitivity to interest rates. Duration is a better indicator of price sensitivity because it takes into account the time value of cash flows. T. Rowe Price uses a custom structure for sector and industry reporting for this product. Diversification exhibits may not add to 100% due to exclusion or inclusion of cash. Sources for credit quality: Moody s Investors Service; if Moody s does not rate a security, then Standard & Poor s (S&P) is used as a secondary source. When available, T. Rowe Price will use Fitch for securities that are not rated by Moody s or S&P. T. Rowe Price does not evaluate these ratings, but simply assigns them to the appropriate credit quality category as determined by the rating agency. T. Rowe Price uses the rating of the underlying investment vehicle for credit default swaps. Certain numbers in this report may not equal stated totals due to rounding. All data is accurate as of the report production date FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. T. ROWE PRICE 6