T. Rowe price launches Global Government Bond High Quality Fund

Darren Hall

T. Rowe Price, a leading global asset manager with US$1.51 trillion in assets under management^[1], has launched Global Government Bond High Quality Fund as the firm’s seventh Australian Unit Trust (AUT) for wholesale and institutional investors.

The fund seeks capital appreciation and interest income by investing primarily in bonds issued by high quality governments, government-related entities and government agencies located around the world and in global currencies. 

Darren Hall, T. Rowe Price’s Head of Distribution and Country Head for Australia and New Zealand said the fund launch was another example of how T. Rowe Price was continuing to investment in areas where its investment capabilities intersected with Australian client needs.

“Over many years, much of the return from bond markets has been made by steadily falling yields and tightening credit spreads. However, this benign investment environment was upended in 2022 as the US Fed, Reserve Bank of Australia and other central banks around the world embarked on a rapid rate hiking cycle to curb high inflation. This new market environment of structurally higher bond yields, higher volatility and greater dispersion between countries creates new opportunities for asset owners to think about their global fixed income program,” Mr. Hall said.

The fund seeks to achieve attractive risk-adjusted returns across global bond markets, supported by an extensive macroeconomic research process. It is a benchmark aware, and a highly flexible government bond strategy that is designed to seek consistent outperformance by exploiting inefficiencies within the global fixed income market and managing portfolios within a disciplined risk management framework. Alpha is expected to be generated through highly active interest rate and country management and not by adding credit risk.

The portfolio manager is London-based Arif Husain, CFA, who has 28 years of investment experience and is T. Rowe Price’s Chief Investment Officer and Head of Global Fixed Income.

Over the past 10 years to December 31, 2023, 88% of T. Rowe Price’s fixed income composites have outperformed their respective benchmarks gross of fees^[2] and 77% have outperformed their respective benchmarks net of fees^[3].

“T. Rowe Price has built a substantial global presence in fixed income investing over the last 50 years, and we are committed to expanding our fixed income product range in Australia,” said Mr. Hall. “Australia is the second largest market for T. Rowe Price in Asia Pacific and is also one of seven markets that are part of T. Rowe Price’s Global Growth Initiative because of its growth potential and our ability to meet financial intermediary and institutional client needs. As part of this initiative, we are actively investing in on-the-ground products, resources and marketing efforts to solidify our presence in the Australian market.”

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Notes:
[1] As of February 29, 2024. Firmwide AUM includes assets managed by T. Rowe Price Associates, Inc. and its investment advisory affiliates. Preliminary data. Subject to adjustment. Past performance is not a reliable indicator of future performance.
[2] 50 of 78 (64%), 53 of 69 (77%), and 38 of 43 (88%) of our fixed income composites outperformed their respective benchmarks on a gross of fees basis for the 3-, 5-, and 10-year periods ended 31 December 2023. Results would have been lower as the result of the deduction of applicable fees.
[3] 30 of 78 (38%), 36 of 69 (52%), and 33 of 43 (77%) of our fixed income composites outperformed their respective benchmarks on a net of fees basis for the 3-, 5-, and 10-year periods ended 31 December 2023. Figures shown are net of fees and reflect the deduction of the highest applicable management fee that would be charged based on each composite’s fee schedule, without the benefit of breakpoints. Includes marketed fixed income composites with a fee schedule, excluding duplicate masters, compared to official composite primary benchmark.