Priscilla Leung, T. Rowe Price
The agreement will make two T Rowe Price Sicav sub-funds available to Hong Kong retail investors through Standard Chartered Bank, and the partnership marks the first time the US firm has made its funds available to retail banking customers locally.
The deal provides T Rowe Price’s “products to a broader segment of the Hong Kong retail market, extending our partnerships beyond private banks and insurance”, said Priscilla Leung, the firm’s head of intermediary business for Greater China.
T Rowe Price set up a Hong Kong office in 1987, and has a total of 25 funds authorised by the Securities and Futures Commission (SFC).
“’SFC authorisation’ means these funds can be made available to local retail investors, but not all of our SFC-authorised funds are currently offered to retail investors,” Leung told FSA.
“Some of our SFC-authorised funds have been available to Hong Kong investors through our previously-established partnerships with private banks and insurance company. The partnership with SCB is the first time our funds are available broadly to Hong Kong investors through a retail bank,” she said.
The two products available through the new channel are the $3.8bn Global Focused Growth Equity Fund and the $3.2bn US Large Cap Growth Equity Fund.
“The new funds added to our shelf will further strengthen our product mix and meet the growing investment demand of our clients, especially our ‘Priority Private’ clients,” said Vicky Kong, head of wealth management, Greater China & North Asia and Hong Kong, at Standard Chartered Bank.
The Global Focused Growth Equity Fund was incepted in 2003 and has been managed by David Eiswert since 2012.
It has generated a three-year cumulative return of 80.4%, outperforming the average (25.2%) of international equity funds available in Hong Kong by a big margin, and also its MSCI All Country World Index benchmark (31.4%), according to FE Fundinfo.
The fund’s annualised volatility of 20.9% is about the same as the benchmark, but higher than its peers (19%). However, it has a superior Sharpe ratio (a measure risk-adjusted returns) of 0.87, compared with the sector average of 0.22, Fundinfo data shows.
Its main sector overweights are information technology, financials and consumer discretionary; its largest country exposure is the US (52%), but the portfolio is underweight its benchmark, and instead has outsized bets to several countries including India, Brazil and the UK, according to the latest fund factsheet.
Top five holdings include Facebook, Mastercard, Charles Schwab, London Stock Exchange, United Health Group and JP Morgan Chase.
Also launched in 2003, the US Large Cap Growth Equity Fund has been managed by Taymour Tamaddon since 2017.
Its 71.5% three-year cumulative return is double its sector average of 35%; its annualised volatility (21.67%) is one percentage point more than its peer, but it has a much higher Sharpe ratio (0.73 versus 0.33), according to FE Fundinfo.
The fund’s performance has closely tracked its benchmark, the Russell 1000 Growth 30% Net index, over five years, according to the latest factsheet (FE Fundinfo data is unavailable for the index), although its portfolio currently diverges significantly.
It has 12% overweight to communication services, and 9.5% underweight to information technology, yet its top five holdings include Amazon, Alphabet, Microsoft, Facebook and Apple, according to the fund factsheet.
“These [two] funds can provide Hong Kong investors exposure to the opportunities of a broad spectrum of carefully selected, high-quality growth companies with strong long-term prospects,” said Leung.
“Retail distribution is a long-term direction of ours to broaden our client base. We are pleased to partner with Standard Chartered because they are one of the most reputable retail banks with a wide branch network,” she said.
Founded in 1937, T. Rowe Price Group has $1.47trn in AUM (as at 31 December 2020), according to the statement.
T. Rowe Price Global Focused Growth Equity Fund and US Large Cap Growth Equity Fund vs sector averages and MSCI ACWI