Nimbus 9 STRATEGY HIGHLIGHTS Ticker: TRVLX CUSIP: 779578103 As of December 31, 2018 Total Large-Cap Value Assets : $98.3 billion 2 Total US Value Equity Strategy Assets: 1 $42.7 billion 2 Total Fund Assets: $25.2 billion 2 INVESTMENT APPROACH p Identify relatively high quality companies with strong brands, assets, and/or franchises facing controversy or uncertainty that is addressable (ex. Cyclical weakness, self-inflicted issues, improving industry cycle). p Consistently applied relative value approach focused on large cap universe with a long-term investment horizon (typically two years or more). p Use valuation as our guide (Price to Earnings, Price to Book, EV/EBITDA, Free Cash Flow Yield, Sum-of-Parts). p Partner with our global research analysts to perform fundamental analysis (build valuation models, company visits, management meetings). p The value approach carries the risk that the market will not recognize a security s intrinsic value for a long time or that a stock judged to be undervalued may actually be appropriately priced. PORTFOLIO CONSTRUCTION p Typically 80-125 stock portfolio p Individual positions typically are below 3%, but higher conviction ideas can range to 5% p Individual industry weights less than 25% of portfolio assets p Reserves will range from 1% to 5% BENCHMARK p Russell 1000 Value Index p S&P 500 Index PORTFOLIO MANAGEMENT Mark Finn, CFA, CPA Portfolio Manager p 20 years of investment experience; 28 years with T. Rowe Price. p B.S., University of Delaware PORTFOLIO SPECIALISTS Caleb Fritz, CFA p 18 years of investment experience; 11 years with T. Rowe Price. p M.A., University of South Florida p B.A., University of South Florida For a complete list of the members of the Fund s Investment Advisory Committee, please refer to the Fund s prospectus. 1 Includes a U.S.-registered mutual fund, a common trust fund, separate accounts, and subadvised portfolios. 2 Assets reported are as of September 30, 2018. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. p T. ROWE PRICE 1
As of December 31, 2018 TOP 10 ISSUERS % of Fund Pfizer 4.9% Microsoft 4.1 Wells Fargo 3.6 Tyson Foods 2.9 NextEra Energy 2.7 Cisco Systems 2.4 Merck 2.4 JPMorgan Chase 2.4 Verizon Communications 2.2 Sempra Energy 2.1 Total 29.6% SECTOR DIVERSIFICATION Russell 1000 Value Index S&P 500 Index 25% 20% 15% 10% 5% 0% Health Care Financials Info Tech Utilities Indust & Bus Svcs Cons Stpls Energy Comm Svcs Cons Disc Materials Real Estate PORTFOLIO CHARACTERISTICS Fund Russell 1000 Value Index S&P 500 Index Projected Earnings Growth Rate (IBES) 9.7% 9.5% 12.2% Price to Earnings (12 Months Forward) 15.2X 14.0X 16.3X Return on Equity (Last 12 Months excl. charges) 15.2% 14.3% 20.6% Price to Book 2.6X 2.2X 4.3X Investment Weighted Median Market Cap (mm) $68,984 $67,302 $101,847 Investment Weighted Average Market Cap (mm) $133,155 $120,888 $204,878 Number of Holdings 107 714 500 Top 20 Holdings as % of Total 46.4% 35.4% 32.6% Portfolio Turnover 145.7% Active Share 63.5% Investment Weighted Median. Based on the fund s underlying holdings and is not a projection of future portfolio performance. Portfolio Turnover represents 1 year period ending 12/31/18. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. p T. ROWE PRICE 2
As of December 31, 2018 PERFORMANCE Three Months One Year Annualized (only pertains to the total return figures) Five Ten Years Years -10.48% -9.44% 6.12% 5.89% 13.03% 7.68% Russell 1000 Value Index -11.72-8.27 6.95 5.95 11.18 7.04 S&P 500 Index -13.52-4.38 9.26 8.49 13.12 7.77 Lipper Large-Cap s Index -12.44-7.58 7.67 5.95 11.03 6.54 Lipper Large-Cap s Average -12.75-8.68 6.60 5.29 10.79 6.33 Lipper Ranking 279 of 465 247 of 423 120 of 363 22 of 278 20 of 189 Morningstar Large Value Category -12.49-8.53 6.85 5.37 10.91 6.52 Morningstar Ranking 738 of 1,244 647 of 1,100 314 of 937 37 of 686 57 of 432 Current performance may be lower or higher than the quoted past performance, which is not a reliable indicator of future performance. 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 or to request a prospectus or, if available, a summary prospectus containing this and other information, call 1-800-638-7780 or visit troweprice.com. Read it carefully. Consider the investment objectives, risks, and charges and expenses carefully before investing. Total return figures include changes in principal value, reinvested dividends, and capital gain distributions. The Fund s gross and net expense ratios as of its most recent prospectus were 0.81% and 0.80%, respectively. Lipper rankings are based on cumulative total return. The Lipper Average consists of all share classes; each share class is counted separately. Morningstar rankings are based on average annual total returns. 2019 Morningstar, Inc. All Rights Reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The fund(s) may have other share classes available that offer different investment minimums and fees. See the prospectus for details. Three Years Fifteen Years FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. p T. ROWE PRICE 3
As of December 31, 2018 RISK/RETURN CHARACTERISTICS Five Years ended December 31, 2018 12 Information Ratio Sharpe Ratio Tracking Error R-Squared Beta Alpha -0.02 0.00 2.59% 0.94 0.96 0.17% Information Ratio Sharpe Ratio Tracking Error R-Squared Beta Alpha -1.99% -0.91 0.00 0.72 0.93 0.94 2.87% Average Annual Return (%) 8 VAL. -4-3 -2-1 0 1 2 3 4 5 Russell 1000 Value Index -4-3 -2-1 0 1 2 3 4 5 S&P 500 Index 4 9 10 11 12 Average Annual Standard Deviation (%) Russell 1000 Value Index S&P 500 Index Past performance is not a reliable indicator of future performance. Figures are calculated using monthly data and are net of fees. FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. p T. ROWE PRICE 4
As of December 31, 2018 ADDITIONAL DISCLOSURES Portfolio Construction: There is no guarantee that the investment will remain within the anticipated ranges of exposure. Active Share is a holdings based measure of active management representing the percentage of a portfolio s holdings that differ from those in its benchmark. Compared to tracking error, which measures the standard deviation of the difference in a manager s returns versus the Benchmark returns, Active Share allows investors to get a clearer understanding of what a manager is doing to drive performance, rather than drawing conclusions from observed returns. The greater the difference between the asset composition of a product and its benchmark, the greater the active share is. Unless indicated otherwise the source of all data is T. Rowe Price. Source for Lipper data: Lipper Inc. Lipper Data (excluding Performance and Risk Return exhibits) is estimated by T. Rowe Price based on information provided by Lipper, Inc., and LionShares. T. Rowe Price identifies the funds that compose the Lipper index and builds an aggregate portfolio for the index based on each fund s holdings as provided by LionShares. Please note that the portfolio holdings for each fund within the index are based on the most recent public information that is available, and since the funds have different reporting periods, some of this information may not be current. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Russell Investment Group. Source for S&P data: S&P. "Standard & Poor s ", "S&P ", "S&P 500 ", "Standard & Poor s 500", and "500" are trademarks of Standard & Poor s, and have been licensed for use by T. Rowe Price. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of investing in the fund. The information shown does not reflect any ETFs that may be held in the portfolio. Source for Sector Diversification: T. Rowe Price uses the MSCI/S&P Global Industry Classification Standard (GICS) for sector and industry reporting. T. Rowe Price will adhere to all future updates to GICS for prospective reporting. Diversification exhibits may not add to 100% due to exclusion or inclusion of cash. Certain numbers in this report may not equal stated totals due to rounding. Unless otherwise stated, data is as of the report date. This material has been prepared for informational purposes only. The views and opinions stated in this commentary are those of the portfolio managers listed as of the date indicated. These views and opinions are subject to change based on market or other conditions and may differ from those of other T. Rowe Price associates. Actual market and investment results may differ materially from expectations. 2019 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc. T. Rowe Price Investment Services, Inc., Distributor. 2016-US-27799 FOR INVESTMENT PROFESSIONALS ONLY. NOT FOR FURTHER DISTRIBUTION. p T. ROWE PRICE 5