2019 Best Equity Fund House Winner Q&A - T. Rowe Price

To help our readers better observe what makes a successful fund house, we sent out questionnaires to the winning teams earlier and asked them to shed lights on their team structure, how various risks have affected their investment decisions, and the major portfolio changes over last year, etc.

Morningstar 22 March, 2019 | 15:43
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Best Equity Fund House - T. Rowe Price

M: Morningstar E: Ernest Yeung, Board of Director, T.Rowe Price Hong Kong

M: What is your outlook for 2019 specific to the markets you cover, and how are you positioned to take advantage of opportunities and/or mitigate potential risks?

E: Global growth is moderating into 2019 but we are cautiously optimistic. In the near term, the bull market will still be supported by modest economic growth, high consumer and business confidence, strong earnings growth, the electoral cycle, and widespread innovation.  However, we will likely see a market tug of war, which should favor investment strategies that are opportunistic and focused on stock selection. We are on the lookout for factors that could be upside surprises in 2019, including innovation in China, rising profitability in Japan, and a possible Brexit resolution.

M: What do you think are the success factors in your corporate culture than enables your firm to consistently deliver for investors?

E: T. Rowe Price believes that critical determinants in our active investing success are a strong investment culture and processes that lead to advantageous decisions. We have cultivated a culture in which talented investors can thrive - our people have the conviction to think independently but act collaboratively, guided by the rigor of our research and the belief that better investment returns come from investment insights that are debated and shared. This vibrant culture is also key to attracting and retaining investment talents around the world. 

While changes in the investment and economic environment are inevitable, stability is a basic principle that guide our consistent approach and long-term perspective that help us deliver value for our clients. Our stable leadership team averages 15 years with T. Rowe Price, while our skilled portfolio managers average 21 years in the industry and 16 years with T. Rowe Price. 

Our founder, Thomas Rowe Price, Jr., focused on meeting each client’s individual needs and emphasizing the importance of their success. More than 80 years after he established T. Rowe Price, we continue to embrace that client-centered philosophy to provide strategies, insights, and services that put the needs of our clients first.

M: Can you share some of your future business plans with us, such as the launch of new products?

E: T. Rowe Price has established our presence in Hong Kong since 1987, and has strategically built out and enhanced our local sales, client service, and operations teams in the Asia-Pacific region over the years. As part of our plans to create a diversified business with sustainable growth, we have added resources to products, investment writing and marketing in the past year to support the needs of our growing client base. To maintain our competitive advantage, we will continue to register new funds in Hong Kong this year to expand our range of investment solutions that delivers long-term value to intermediary clients. In addition, significant resources will be devoted to grow our partnerships with retail distribution channels as part of our commitment to local investors.  

M: How has the firm been responding to industry fee pressure?

E: One of the best things we can do to respond to fee pressures is maintain our excellent investment results and deliver as much alpha and value as we can. This will help protect our ability to charge fees commensurate with that.

We also look strategically at where we might need to adjust pricing and regularly analyze where we need to be most competitive to make sure we are competitively priced in those areas. In that regard, we have a wide range of pricing capabilities and are positioned to meet the pricing requirements of clients and prospective investors.

M: Are there plans to further strengthen your investment team? In which areas?

E: The size and depth of our investment team demonstrates our commitment to deliver investment returns that go beyond the limitations of simply following an index.

In January 2019, our Hong Kong-based investment team has been strengthened by the joining of Chris Alderson, one of our senior most investment professional who was previously based in London and has lived in Hong Kong and Tokyo earlier in his career. Having been with T. Rowe Price for 31 years, Chris is a member of our Management Committee, co-head of Global Equity, head of International Equity and chair of the International Equity Steering Committee. His move is a demonstration of our commitment to further enhance our investment strength in the region.

Globally, we have a strong team of more than 600 investment professionals and we will continue to strengthen our investment process by adding local talents in the region and tapping our global pool of investment professionals.


View all Morningstar Hong Kong Fund Awards 2019 articles here.

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