Best Equity Fund House - T. Rowe Price
M: Morningstar E: Elsie Chan, Head of Intermediaries, Asia ex- Japan
M: What is your outlook for 2018 specific to the markets T. Rowe Price covers, and how are your portfolio managers positioned to take advantage of opportunities and/or mitigate potential risks?
E: The world’s major developed and emerging economies are operating in a synchronized expansion for the first time since the 2008/2009 global financial crisis. Barring unpredictable political or economic shocks, we expect to see continued global economic growth for 2018, albeit at a slower pace compared to what we observed in the latter half of 2017.
We believe corporate earnings growth, supported by the continuation of a broad-based economic recovery, will be a primary driver for a rise in equity returns. Stock valuations, on a relative basis, are trending above historical averages, but we believe there are opportunities for selective assets.
M: Can you comment on the major risks facing financial markets, such as rising US rates and elevated asset prices? How do these risks affect your investment decisions?
E: Some of the potential risks we see globally include geopolitical shocks, the potential of valuations being extended even further, and missteps in central bank tightening, which could spark an unexpectedly fast rise in interest rates and inflation.
In the U.S., if there is an unexpectedly fast rise in interest rates, that could become a significant headwind to growth. Within emerging markets, the possibility of a slowdown in China, potential increased tensions between the U.S. and North Korea, or a significant drop in commodity prices would be especially unfavorable to growth in these regions.
Amidst these risks, we will continue to hold up our consistent, client-centered investment philosophy, which has helped us navigate all kinds of markets. As our founder, Thomas Rowe Price, has noted ‘change is the investor’s only certainty.’ The core of our investment philosophy is that we utilize proprietary research to guide active investment selection and diversification to reduce risk, and at the same time identifying the beneficiaries of the change.
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’s collaborative culture is the key to our success. We value collective intelligence as much as individual brilliance. We bring diverse perspectives to the table and solicit challenging opinions to make the best decisions for our clients. That’s how we deliver investment success that spans generations.
As always, T. Rowe Price is an asset management firm focused on delivering global investment management excellence that investors can rely on—now and over the long term. Since 1937, we have had one purpose: to help our clients invest confidently to create secure financial futures. Backed by the strength of our experienced leadership and the stability of a rock-solid balance sheet, our talented associates around the world 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. To maintain our competitive advantage, we will continue to seek authorisation of new funds in Hong Kong to deliver a wider range of investment solutions to intermediary clients. In addition, we will continue to devote resources to grow our partnerships with retail distribution channels as part of our commitment to local investors.
M: Are there plans to further strengthen your investment team? In which areas?
E: Research is the essence of T. Rowe Price’s approach to investing, and the size and depth of our platform demonstrates our commitment to fundamental equity analysis. We have a strong team of 325 equity professionals globally1 (as of 31 Dec 2017) and we will continue to strengthen our research process by adding local talents in the region and tapping our global pool of investment professionals.
View all Morningstar Hong Kong Fund Awards 2018 articles here.