Performance evaluation of the T. Rowe Price International Stock Fund
The T. Rowe Price International Stock Fund (PRITX) has been an above average performer for all but the trailing-one-year period. Year-to-date until August 31, 2016, the fund ranked fourth in the group of 12 funds chosen for this review. We’ve graphed its performance against the iShares MSCI ACWI ex U.S. ETF (ACWX) and the iShares MSCI EAFE ETF (EFA).
Let’s look at what has contributed to the fund’s good performance in 2016.
Contributions to returns
The information technology sector has been the leader among the fund’s sectoral holdings in terms of positive contributions to its 2016 returns. Taiwan Semiconductor Manufacturing (TSM) and ARM Holdings (ARMH) have led the sector, supported by Tencent Holdings (TCEHY) and ASML Holding (ASML).
The materials sector, which forms less than 5% of the fund’s portfolio, has emerged as the second biggest positive contributor to the fund. Australia’s South32 Limited has been the main driver of the sector’s good performance. Kweichow Moutai Company, Nestlé (NSRGF), and Philip Morris International (PM) are among those stocks that have boosted the consumer staples sector. Meanwhile, Canadian Natural Resources (CNQ) and Royal Dutch Shell (RDS.A) have fueled the gains in the energy sector.
On the other end of the spectrum are the financials and healthcare sectors, which have weighed on the fund in 2016. Credit Suisse (CS) and The Royal Bank of Scotland Group (RBS) have been primarily responsible for driving down the financials sector. Aviva (AV) and Lloyds Banking Group (LYG) have played important roles as well. Had it not been for positive contributions from Itaú Unibanco Holding (ITUB), The Toronto-Dominion Bank (TD), and others, the sector would have done even worse.
Meanwhile, Valeant Pharmaceuticals International (VRX) has been detrimental to the healthcare sector, though some of the pain has been alleviated by positive contributions from Astellas Pharma (ALPMY).
PRITX has had a decent 2016 so far. The absence of a sizable negative contribution from any sector has been useful to the fund. Even with its sizable exposure to the financials sector, the fund’s stock picks have kept negative contributions in check. It’ll be interesting to see how the remainder of 2016 pans out for the fund.
Let’s now move on to the Thornburg International Value Fund Class A (TGVAX).