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Looking at the Portfolio of the T. Rowe Price European Stock Fund

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Overview of the T. Rowe Price European Stock Fund

The T. Rowe Price European Stock Fund (PRESX) notes that it seeks to grow capital “through investment primarily in common stocks of both large and small European companies. Current income is a secondary objective.” The fund literature states that its assets will be invested in at least five countries.

The fund management uses a bottom-up approach while constructing the portfolio. Industry sector and country outlooks do not matter as much as company fundamentals. The fund literature states that “country allocation is driven largely by stock selection, though we may limit investments in markets or industries that appear to have poor overall prospects.” It further states that it does not have a growth or value bias while picking stocks.

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The fund’s assets were spread across 65 holdings in September 2016, and it was managing assets worth $1.2 billion. The September portfolio’s equity holdings included Nestlé S.A. (NSRGY), AstraZeneca plc (AZN), Eni SpA (E), Liberty Global plc (LBTYA), and LVMH Moët Hennessy Louis Vuitton S.E. (LVMUY).

Portfolio changes in the T. Rowe Price European Stock Fund

Consumer discretionary is the most-invested sector by the PRESX, followed by financials. These two sectors combine to form 31% of the portfolio. Industrials and healthcare are the only other sectors whose portfolio weight reads in double digits, and they combine to form 23% of the assets. Compared to its peers in this review, PRESX has a sizable representation in the utilities and telecom services sectors. These two sectors combine to form a sizable 15% of the portfolio pie.

A look at the quarterly portfolios of PRESX for the past three years until September 2016 shows that financials have given up the top-invested sector spot. Exposure to the sector has been sharply cut down in the past year from over a quarter of the portfolio to under 15%. Although consumer discretionary is the most-invested sector, its portfolio weight has also come down over the past three years. The same is the case with industrials.

On the other end of the spectrum are the energy and healthcare sectors, which have seen their respective portfolio shares increase. Fund management has taken a liking to stocks from the tech sector as well.

What has contributed to T. Rowe Price European Stock Fund (PRESX) YTD 2016 performance? Let’s find out in the next article.

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