Good morning, everyone, and welcome. I'm Bill Stromberg, CEO of T. Rowe Price, and my colleagues and I are pleased to be here to host our fifth annual Investor Day. We're going to provide an update on the firm's strategic priorities and our execution against them. The presentation should take about 50 minutes, and we'll have another hour or so for Q&A. This is our forward-looking statements page. It simply says that this presentation may contain estimates or opinions about our potential business results, and that actual results could differ from the forward-looking statements. We ask all investors to carefully consider the risks described in our 10-K before investing. Here's our specific agenda for today. After I offer some overview remarks on the company, our progress in 2020, and priorities for 2021, Rob Sharps, our President, Head of Investments, and Group Chief Investment Officer, will update you on our investment capabilities and performance. Next up is Robert Higginbotham, Head of Global Distribution and also Head of Product for us. He's going to review our progress in distributing through our various distribution channels and in product line evolution. Céline Dufétel is next, our Chief Financial Officer and recently named Chief Operating Officer. She'll talk about our progress on key financial and operating drivers for the company, including an update on our expense management, capital management, and balance sheet. The four of us will be available to take your questions, which you can submit through the platform. I thought it would be helpful to remind you how we at T. Rowe Price describe ourselves to our clients. We are a global investment management firm, intensely focused on delivering top-tier investment results and service to our clients. We're now operating out of 17 countries. We're an independent, publicly-traded firm with rock-solid financial strength, significant inside ownership, and a stable leadership team. We're performance-driven and collaborative, but a strong culture is perhaps our most differentiating strength, and it is absolutely critical to our long-term success. For decades, we have leaned on our culture during tougher times, and we've done so for sure throughout the current pandemic. I'm confident it will carry us all the way through. Our vision is to be a premier global active asset manager, delivering durable value to our clients. We're executing on a long-term plan with objectives that support this vision. Key planks of the vision are shown here. We want to extend and leverage our retirement expertise globally while becoming an ever more integrated investment solutions provider. We're committed to having strong processes and effective controls, which are increasingly important as we grow and globalize the company. Our objectives around ESG and sustainability continue to grow in importance. We're investing pretty hard here, and our approach is to embed best practices throughout the company so that we can demonstrate sustained leadership in these areas over time. We intend to remain a destination of choice for diverse top talent and to manage the company with emphasis on empowerment, accountability, and rigor. If we do all of these things well, we believe we can deliver for our clients and also for our shareholders over time. Over the past year, a series of violent acts of racism against Black U.S. citizens and other underrepresented minorities angered and saddened us all. Across T. Rowe Price, our associates engaged in conversations to support each other and deepen our understanding of racism's extensive roots in our society. I'm really proud of the way our associates responded to this crisis. Diversity, equity, and inclusion are strategic enablers for our business, important to our long-term success. We made good progress on a variety of DE&I initiatives and have listed some accomplishments here on the slide. Our leadership team restated its commitment to DE&I and is executing a plan to improve the representation of women and minorities at the company. We strengthened our DE&I leadership team and engaged more of our associates than ever. On the right-hand side of this chart, we've also listed some metrics that are helping us to track our progress. Though we have further to go on our diversity journey, our commitment is unwavering, and I'm encouraged by the progress we're making. As of March 31st, our assets under management have grown at 12% compounded over the last 10 years, driven by good market returns, the alpha we've generated above the market's return, and by positive net cash flows. Also highlighted here that the gold line is a 16% annualized growth of our multi-asset business. This includes our very successful Target Date and Target Retirement strategies, both, as you know, key growth drivers for the company. T. Rowe Price has been in business now for 84 years. We've operated as a publicly-traded company since our 1986 IPO, delivering strong and consistent financial performance. On the left, we show the growth of earnings per share in the blue line and dividends per share with the green from our IPO right through the end of 2020. With our most recent dividend increase in February, the firm's now raised its dividend for 35 consecutive years. On the right, you can see the compound annual growth rates for revenues, GAAP earnings per share, dividends per share, and total shareholder return over the last five, 10, 20, and 30-year periods ending December 31st, 2020. Overall, T. Rowe's total return to shareholders has been very attractive and in line with the growth of earnings and dividends over the long pull. We continue to manage the company with a long-term horizon in pursuit of consistent financial performance, and we believe that long-term shareholder returns will be consistent with the growth of earnings and dividends over time. Notwithstanding our long-term financial success, several trends since the financial crisis of 2008 and 2009 continue to drive disruption in our business and across the industry. To highlight a few, Target Date fund competition has gradually intensified in recent years. Our performance remains outstanding here, and we continue to invest in our capabilities. There also has been accelerated client interest in products that consider ESG factors and in alternative strategies. We're investing in both of these areas with a long-term focus. Passive or index investing has continued to grow, raising the bar on performance and pressuring fees. Increasingly, many clients are also requesting customized vehicles beyond mutual funds, and we're moving quickly to make them available. Lastly, another important trend is that large distributors such as Morgan Stanley, Bank of America, or Schwab are working with fewer asset managers over time, heightening the importance for firms like us to invest in healthy partnerships with all of our clients. Despite the ongoing challenges, 2020 was another strong year for T. Rowe Price, with significant progress made across a variety of strategic initiatives. It's particularly special given the pandemic and its disruption to our business and to our associates. For example, we broadened our investment teams as we announced the formation of a new T. Rowe Price Investment Management subsidiary, which went live in the second quarter of 2022. Over time, we expect TRPIM, as we call it, to allow us to continue to deliver excellent investment results for years to come, even as our business scales. Within distribution, we continue to invest in our U.S. intermediaries business, we expanded our sales efforts in EMEA and Asia- Pacific. Good new business momentum in these areas continued in 2020, this gives us confidence to continue to invest for growth here. Finally, our 2021 priorities have some evergreen elements, such as delivering excellent investment results, attracting, developing, and retaining top diverse talent, continuing diversification by expanding our global product and distribution teams, and strengthening our operations and technology platforms. These are important. We should be focusing on them every year. We also have some unique and important goals for this year that will position us for growth and efficiency in the years ahead. As we recently announced, we're further strengthening our highly rated Target Date products and tightening up our go-to-market plans. We're preparing for the launch of our new investment subsidiary, T. Rowe Price Investment Management, targeted for the second quarter of 2022. We're expanding our partnership with FIS to further transform our RPS technology and operations. Robert will talk a little bit more about that soon. We're launching additional active equity ETFs as well as our first fixed income ETFs. Finally, we're further embedding diversity, equity, and inclusion and ESG principles across the enterprise. We have a thorough multi-year plan to grow and diversify the business while driving efficiency throughout the organization. Thank you for the confidence you placed in us. We're going to continue to work as hard as we can and as smart as we can to continue to earn it. With that, I'd like to turn it over to our President, Head of Investments, and Group CIO, Rob Sharps. Thank you, Bill. It's really nice to connect with this group again. Our last Investor Day was February 19, 2020, a date which happens to be the pre-pandemic peak in the S&P 500 and only a few weeks before our lives really changed. I'd like to take this opportunity at the outset to say that I'm genuinely proud of how our investors responded to and navigated what has been a very turbulent and frenetic market backdrop. They've worked virtually and tirelessly over the course of the last 15 months to deliver for our clients. Here we are back with you, and the market is again at or near all-time highs. While so much has changed, I think you'll find my message to be consistent with past Investor Days. Over the course of the next 15 minutes or so, as I update you on our investment results and growing capabilities, I hope to demonstrate three things. First, that, as Bill said, our culture remains deeply rooted in and committed to delivering investment excellence. Second, that our investment performance remains strong. Finally, that while we take nothing for granted, we remain quietly confident that we're well-positioned to deliver for our clients. Our teams have worked diligently to create an integrated global platform consisting of over 700 investment professionals focused on developing insight and delivering great outcomes for our clients. Our portfolio managers and research analysts collaborate across regions and asset classes, sharing insight to improve client outcomes. For example, our Global Equity Research platform leveraged learnings from our early holdings in U.S.-based Internet companies to inform highly successful investments in Chinese Internet companies and our approach to other e-commerce and social media platforms around the world. More recently, in the fall of 2020, our equity and credit research teams organized meetings with a number of airlines to assess liquidity and funding. The shared perspective from these meetings was essential to our view on airline stocks and on the attractiveness of new debt deals backed by an unusual source of collateral. I think these examples show that our platform is unique and powerful, and is a major reason why we've been able to sustain such strong investment performance. The overall results presented here, I think, can be fairly characterized as solid and are led by continued strength in global equity and multi-asset portfolios. In equity, relative performance over the last year improved in our value portfolios, which were broadly well-positioned for the rotation towards cyclical sectors as vaccine data led market participants to anticipate reopening. Several of our growth portfolios continued to deliver strong results as well, notably U.S. large-cap growth and our global growth strategies. Our fixed income results improved nicely over the last year, with 91% of our funds outperforming passive peers. Our multi-asset division's performance is truly best in class over one, three, five, and 10 years, driven by our flagship retirement date funds, which we'll look at more closely in a few minutes. Although Thomas Rowe Price was a pioneer of growth investing, and we remain recognized for the success of our growth strategies, we also have a strong suite of value strategies led by an experienced team of portfolio managers. In aggregate, these strategies have competitive performance and, not surprisingly, have benefited from the recent rotation. I highlight this because these strategies stand to benefit if the headwinds facing the value style over the last decade abate. In fact, they've recently drawn more interest from clients and have generated positive flows over the last nine months as style leadership has shifted. We're also well-positioned if leadership in equities pivots from domestic to overseas markets. We have a robust lineup of global, developed market, emerging market, and regional equity strategies with compelling performance. Here, I'd like to highlight our global equity franchise. In particular, both of our global growth franchises have delivered excellent performance, ranking in Morningstar's top decile over one, three, five, and 10 years, and dramatically outperforming their benchmark, the MSCI All Country World Index. We also have strong numbers in Global Value and are building strong track records in other global equity strategies, including Global Equity Dividend, Global Select, Global Impact, and QM Global Equity. Our performance in fixed income is trending favorably. Our multi-year focus on developing fixed income capabilities across sectors is paying off, positioning us to sustain recent improvement going forward. Currently, we have strong track records across several strategies, including, but not limited to Global Multi-Sector, Stable Value, Total Return, and U.S. High Yield. All of these strategies are in various stages of scaling commercially and have ample room to grow. Our retirement date funds have outperformed their benchmarks. More importantly, they've consistently outpaced competitive offerings, regardless of whether those competitors use building blocks that are actively managed or passive. In fact, our funds have added over 100 basis points of value annually versus our passive competitors over one, three, five, and 10 years. Eight of nine retirement date funds with a 15-year track record are ranked number one in their category. Many of our retirement funds and Retirement I Funds were recently upgraded from silver to gold by Morningstar. We are the only active retirement date fund manager with a gold rating. More importantly, we are the only manager, active or passive, to receive Morningstar's highest rating across all three pillars, people, process, and parent. This year, I wanted to share a few themes around our approach to delivering our investment capabilities and solutions to global clients while addressing the disruption that Bill alluded to earlier. We're leveraging what we already do well to launch regional and country-specific vehicles for investors in Europe, Middle East, and Africa, and Asia-Pacific, with Japanese ITMs being one particularly successful example. In the United States, we're launching additional vehicles, including exchange-traded funds and model accounts, to complement our mutual funds and meet the needs of a more diverse range of clients. Finally, we're seeing broad interest in ESG-specific products, alternative strategies, and more concentrated portfolios. We have growing capabilities and offerings to address each of these areas. I'd like to spend a few minutes on T. Rowe Price Investment Management, or TRPIM, as it's known internally, because it's such an important initiative for us. TRPIM, which we announced last November, will ultimately be a fully independent investment division that replicates our key cultural tenets of investment excellence, collaboration, and investing with a long time horizon. While the TRPIM team will invest independently, TRPIM will still benefit from the scale of T. Rowe Price with shared distribution, legal and compliance, and other corporate functions. As we previously announced, we're moving six strategies and over 100 associates into TRPIM. The combination of these six strategies allows us to maintain key investment processes up and down the market cap range and across style boxes. Additionally, the inclusion of our U.S. High Yield strategy will also enable collaboration across asset classes within T. Rowe Price. Ultimately, the segregation of these six strategies will help sustain a deep partnership between research analysts and portfolio managers, free up capacity and high conviction ideas, and allow our team to continue delivering strong investment results for our clients. I'm pleased to report that at this point, we're on schedule with all key aspects of the program. Hiring began over two years ago and is now essentially complete. We plan to request approval for the advisor change from our mutual fund board this July with individual client approvals to follow and final separation expected in the second quarter of 2022. Our directors of research have done an outstanding job recruiting to ensure that both U.S. equity teams are fully staffed while maintaining what we believe are incredibly high standards. For me, the process clearly validated that T. Rowe Price remains a prime destination for top investment talent. At this point, I believe we can confidently say that we're headed toward two built-for-purpose investment teams with a similar mix of experience across research and portfolio management. Importantly, each entity is well-represented by long-tenured T. Rowe Price portfolio managers and analysts to serve as culture carriers. ESG is another important initiative for us, as it's one of the fastest-growing areas of interest among our clients and one of the fastest-growing areas within our firm. In 2020, we made further investments in our ESG research platform. Last year, I spoke to you about our proprietary responsible investing indicator model or RIIM. At the time, RIIM covered 14,000 securities. Since then, we've refined the model and broadened its scope to cover 15,000 issuers. We created frameworks within our RIIM model that cover municipal and securitized bond issuers in addition to corporate and sovereign issuers. At this point, we've integrated ESG research into virtually all of our client assets and are developing strategies to further leverage our ESG capabilities. We currently have responsible versions of six strategies available in our SICAV range, and by the end of the year, expect to have 13 more for a total of 19. Earlier this year, we launched Global Impact Equity, our first impact strategy. Looking ahead, our product investment and distribution teams are evaluating additional opportunities to deliver dedicated ESG-focused investment strategies to our clients in an authentic and durable way. Last August, we were among the first investment managers to launch semi-transparent active ETFs. The launch, utilizing our proprietary delivery model, was the culmination of years of work. These vehicles enable us to deliver our alpha generation capabilities to investors in a convenient, tax-efficient, and low-cost structure. Our initial launch featured four flagship U.S. equity strategies with strong performance track record and long-tenured portfolio managers. Importantly, our ETFs are performing well in the market and are trading with industry-leading spreads, ultimately resulting in better returns for investors. Semi-transparent active ETFs are still in their infancy, but we believe they have significant room for growth. As these funds approach their one-year track record later this summer, we are seeing interest build among major intermediary platforms. We intend to launch additional semi-transparent active equity ETFs, as well as our first tranche of transparent fixed income ETFs later this year, and have plans to further expand our offerings across regions and asset classes over time. Last year, I introduced our investment data insights team, a group of data scientists, data engineers, application developers, and designers. Since then, this team has completed over 140 projects for more than 90 analysts and portfolio managers across the T. Rowe Price investment platform, demonstrating clear value and broad interest in leveraging the power of proprietary data gathering and analysis to help improve our investment decisions and outcomes. In summary, we are adding capabilities in anticipation of evolving client needs, fostering a culture that attracts top-tier investors, and focusing on the long term. As Bill said at the outset, investment excellence is at the heart of everything we do. Thank you for your attention. With that, I'll turn it over to Robert Higginbotham. Thank you, Rob. I'm Robert Higginbotham, responsible for global distribution. Over the next few minutes, I'd like to talk you through three main things. Firstly, how we are continuing to deliver on and invest in a very broad, diversified growth plan for all of our client-facing businesses. Secondly, we believe we've got one of the strongest retirement franchises in the U.S., which in itself is one of the largest opportunities in global asset management, and how we're continuing to support and grow that franchise. Thirdly, the benefits that we believe we get on behalf of both our clients and our firm from the scale that we have and that we can leverage across the world. If we look at the overall structure of our distribution businesses, you can see that we have one of the broadest and deepest distribution franchises in global asset management, right from direct retail in the U.S., through bundled DC record keeping, into institutional and intermediary businesses in all of the main asset management markets around the world. You'll see a number of boxes highlighted in orange. Those are the ones that I'm going to go into in a little bit more depth and detail, but I will be sure to cover off both our Americas business and our EMEA business as I go through the results that we've delivered in 2020 and in the first quarter of 2021. If we look at how we've begun to grow and invest our business over the last few years, here you'll see on the left-hand side a number of charts that show our physical presence in the world and also the number of offices and our headcount growth, particularly, where you can see both in EMEA and in Asia- Pacific, we have, over the last three years, grown our headcount between 30% and just over 60%. That clearly gives us a footprint from which we can continue to develop new client relationships and grow both gross and net flows. It's not just about people and offices. You can also see on the right-hand side how we've invested significantly in the technology platform. You will have heard from Rob that we've invested a lot on the investment side of our business in data and analytics. That is also true for how we have invested in enabling our sales teams and our marketing teams to understand how to best serve our clients and which clients we feel we could do more business with and provide data to enable our sales teams to work more effectively with those clients and prospects. We also have, with our direct retail business, right through to our intermediary and institutional business, a very significant investment in a range of digital client-facing web properties, whether it be services and advice for individual investors and plan participants, right through to content and thought leadership for our institutional and intermediary clients. It's both people, location, as well as data and technology that we've been investing in to enable the growth that I'll come on to talk to you about. On the next slide, you can see the growth in assets under management that we've had since 2010. Not only is it about the growth in AUM per se, but it's also about the continued investment in diversifying that growth, so that you can see on the left-hand side of the chart, in 2010, our business was reasonably diversified by both channel and by geography when we had over $400 billion of assets under management. You also can see that as we've got to the end of 2020, we've continued, and our business is now over $1.5 trillion at the end of quarter one, but is also still a significantly diversified business. As we will see when we come on to talking about net flows, that has been reasonably balanced over time, both across geography and across segment. That's the assets under management outcome of the investments that we've put in. If we look on the next slide at the flows, on the left-hand side, you can see how it is split down by region. We've talked to you in previous years about the amount we've been investing in both our EMEA and our APAC, as well as our Canadian businesses to diversify away from our U.S. heritage. You can see that over the last three calendar years, up to the end of 2020, 84% of the net growth of our firm has actually come from clients and markets outside of the U.S. You can see that in quarter one 2021, that clearly reversed a little bit. That was a relatively narrow, unique situation in our institutional business in EMEA. We don't believe that's symptomatic of anything underlying. In fact, our intermediary business in EMEA has showed continued growth consistently over the recent quarters. We believe that puts us in a good position to return to growth over time in EMEA. On the right-hand side, you can see, again, really the benefits of diversification. In some of the earlier years on this chart, you can see our U.S. intermediary business was very much an engine for growth. Last year, that business was a little bit more troubled. You can see that in the first quarter of this year, that business has returned to growth, and a really consistent delivery from our APAC business over time. The other business I'd draw your attention to, which is one we'll come into more detail on, is our direct retail business. That is a real, if I can use the phrase, anchor to windward, where it has a real degree, not only of AUM stability and very long client persistency, but also we believe we can invest to continue to grow that, so that that business contributes to our 1% to 3% organic growth rate target. I said I would talk about some things that went across our businesses. The first one I referred to in my introductory comments was around our retirement franchise, and I'd like to talk about that now. We talked to you about that last year in general terms across all of our retirement business in the U.S. It feels appropriate in light of the recent announcement we made about our Target Date funds to focus a little bit more in on Target Date. Whilst you may have particularly had your eye caught by the pricing changes that we recently announced, we believe that our retirement date franchise is a lot more than simply a set of pricing changes, as important as they are. In developing our retirement franchise and our Target Date franchise, particularly, not only are we focused on the value for money we deliver, so the performance that Rob referred to earlier in conjunction with the price changes that we've just announced, but we also believe that we have one of the broadest solution sets available to clients, prospects, plan sponsors, plan participants in the U.S. We have high equity and low equity glide path versions of the Target Date funds. We have three different variants in terms of how much active and passive components clients will want to hold, and we can deliver those both through funds and through trusts in a very comprehensive way, as well as on top of that, offering the ability for potentially larger plans to have a more custom Target Date solution. Putting that combination of a value proposition together with a broad range of solutions, we will also be running significant marketing campaigns over the course of the rest of this year, really to reinforce the breadth and the depth of the Target Date franchise that we believe we have, and our ability to meet plan sponsors and plan participants wherever they are in terms of the needs they have, in terms of equity glide path, or in terms of contribution of active and passive, or the particular vehicle they think they need. It's not just about accumulation and Target Date. We also believe that there's continued innovation possible, particularly as people move towards the end of their accumulation phase. We're working on having a managed account QDIA solution available initially on our own record-keeping platform, but also continuing to invest in building out our retirement income product range so that we have a complete solution through accumulation and decumulation. With that, we think that we will continue to build out one of the broadest and deepest retirement franchises in the U.S., which as I said earlier, is one of the largest marketplace opportunities for global asset managers anywhere. Beyond an overlay in retirement, I'd like to talk about three specific of our U.S. businesses. I talked about our direct retail business, what we call individual investors. You'll see a number of points on this slide. What I'd really like to draw out is two or three aspects. Firstly, the major strategic contribution our direct retail business brings to our firm is not only at scale at over $200 billion of assets under management, but most critically also, its very attractive persistency rate. In an institutional or an intermediary business, we might see clients hold their investments with us for somewhere between four and six years. In our direct retail business, we see that up at 10 to 12 years. You can imagine that a time value of money of that $200 billion of assets under management is really worth many multiples equivalent to other channels. The combination of scale and really attractive persistency makes it a very attractive business for us. It's a business that in the world of increased digital reach and increased open architecture, we are looking to make sure that we find that T. Rowe Price is a very attractive place for people to have a direct relationship with us. The research that we've done with our customers tells us that if we can provide a degree of investment intimacy with our brand directly that they can't reach via broader platforms, through improved access to our portfolio management and investment talent, thought leadership, but also making sure that when it comes to the value proposition they get, the best place to buy T. Rowe Price products is with T. Rowe Price. We formulated a strategy last year for our direct retail business that we started executing towards the end of 2020, and we're beginning to see good results. In fact, at the end of 2020, our net flows had got back to their previous peak in 2016, and we're continuing to feel good about the momentum that we're seeing into 2021. I'd like to talk about our bundled defined contribution business, what we call Retirement Plan Services. You may well have seen the recent announcement of our further partnership with FIS. A unique characteristic of RPS in the marketplace is that we have very high levels of proprietary assets under management, where we are not only doing the record keeping, but also the asset management. That makes it an attractive business for us with over $150 billion of client assets under management. It's also a business which over time will benefit increasingly from scale, and we believe that by working with FIS, we can work with one of the leaders in global operations and technology for them to bring their expertise and the scale to the benefit of both our plan sponsors and plan participants, but also make sure that as we begin to invest and scale the business further, everybody can get the benefits of that scale. The combination of high proprietary assets under management, real scale at $150 billion of assets under management, and improved operations and technology scale and capability, we will believe will make this business more successful over time. The third of our U.S. businesses that I'd like to talk you through is our U.S. intermediary business. It's one we've talked to you a fair amount about over the last few years. Particularly we've talked to you about our broker-dealer build-out. We're particularly looking forward to 2021, where we're aiming really to finish off the first main phase build-out of territory coverage in broker-dealer. We started that a few years ago. We've been very deliberate about extending that year-over-year. With a good push to the line, we think we can complete that in the end of 2021, hopefully having towards 50 U.S. territories covered, which we believe will give us a very competitive coverage. You can see on the left-hand side, the growth in our assets purely from broker-dealer over time. This is exactly the same chart as the one I showed you earlier with the overall group AUM, particularly highlighting our broker-dealer build out so that you can see the contribution that that's been making over time. On the right-hand side, you can see it's not just about building out our broad advisor coverage through broker-dealer. We have had a heritage with our U.S. intermediary business of having very strong relationships with the home office and research coverage teams, in U.S. intermediary. You can see that we're very pleased that we've continued to have very strong levels of satisfaction from those home offices. It's very much a matter of retaining the strength that we've had in U.S. intermediary with the home office, as well as making sure that we build out a strong broker-dealer and broad advisory coverage model. Both with people on the ground, but also with product services, tools, digital enablement, and content. We will continue to do that. The last of the individual businesses I'd like to talk about is our Asia-Pacific business. You will have seen on the charts earlier how we've continued to generate strong net organic growth from Asia-Pacific. That has very much evolved over time from a business rooted initially in our Australian business and then a joint venture operation that we had some years ago in Japan, through to really a broad-based business across the region now. Our Australian business continues to be important to us as we built more, particularly in the intermediary business over time in Australia. We took over more direct control of our business in Japan, both by having our own distribution relationships, both institutionally and intermediary, but also more recently building out our own domestic product range to service clients in Japan. That has been a significant source of growth for us, particularly in the last two calendar years. We've been building out in the rest of the region. We've had a long history of generating business out of China, from our team based in Hong Kong, and we've recently announced that we will augment that by having our first onshore distribution leader who will be based in China, and we'll be developing our plan for further onshore distribution in that important part of the world. We are very pleased with the results we've been seeing in Asia-Pacific, and we will continue to invest in the platform and the distribution team and the product range to support that growth going forward. One last topic I thought I would talk about, I mentioned scale as an advantage. I think nowhere is that really more pertinent in many ways than the product ranges we offer, and particularly the ability to offer global, whether that's global equity or global fixed income. In order to do that, one needs a very broad global research platform as well as a broad platform of global portfolio managers and products. You may well know that a lot of our recent net organic growth has been contributed to particularly by our global equity product range, whether it be global sector products such as Global Technology or more broad diversified products such as Global Growth Equity or Global Focused Growth. As with any success in asset management, one of the challenges can be managing capacity to look after the interests of the existing clients in all of those strategies. As we've been generating new growth, we've also been making sure that we broaden out our global equity range, and you can see on this page, the breadth of our global capabilities that we believe are well-positioned, both in terms of meeting client need and demand, but also being sufficiently built out now so that as and when other strategies we will slow down for capacity management reasons, we've got plenty of alternatives to engage our clients with that really demonstrate the benefits of scale from our firm. In summary, you can see that we have continued to deliver on diversified growth, so not just growth for growth's sake, but making sure it's diversified by both geography and by client segment, institutional, intermediary, direct, as well as EMEA, APAC, Canada, and the U.S. You can see that we believe we've got a very strong retirement franchise that we are continuing to invest in to make sure that it is incredibly competitive given the scale of the U.S. retirement opportunity. We continue to believe that we've got unique scale that we can bring to the benefit of our clients, but also to make sure that we can continue to use that scale to support the growth of our business into the future. I hope I've been able to give you a rundown of what we've been doing in our client-facing businesses over the course of the last year. I'll now hand over to Céline Dufétel, our CFO and COO. Thank you very much. Thank you, Robert. I'm Céline Dufétel, COO and CFO. I intend to cover four topics today. First, I'll discuss organic growth and in particular, changes we are seeing in the seasonality of our flows. Second, I'll review the impact of the pricing changes we are making to our Target Date suite. Third, I'll walk through where we are investing as well as where we are driving efficiencies that enable us to reinvest in the business. Finally, I'll talk about our approach to capital management, including our perspective on M&A. Before we go into these topics, we show here a snapshot of revenue and expense growth as well as return of capital over one and five-year time periods. As you know, we have a very long and consistent track record of value creation for our stockholders. Over the last few years, a combination of rising markets, the alpha we've generated, and organic growth have driven sustained revenue growth and enabled us to continue to invest in the business while also expanding margins. We've also sustained our track record of strong return of capital to stockholders, including returning over $2 billion in capital through the annual dividend and stock repurchases in 2020. Turning to organic growth. Our long-term organic growth target of 1%-3% remains unchanged. However, the patterns of how our flows occur throughout the year are evolving, and specifically, we believe that seasonality of our flows is waning. We show here quarterly flows as well as the average in each of the quarters over the last five years for quarters two, three, and four, and average over the last six years for the first quarter, including the first quarter of this year. We see several factors driving this change in seasonality. First, EMEA and APAC, as you heard from Robert, have become a much larger share of our net flows, and we do not observe a particular seasonality in these flows. Second, we've also seen more large institutional flows. Some of those are in EMEA and APAC, but also in the U.S., including in the retirement channel. Finally, big market swings like we saw in December of 2018 or March 2020 lead to elevated levels of retail and participant activity, often reallocating away from equities and Target Date strategies. The combination of these factors has increasingly outweighed other seasonal patterns, such as participant deferrals into their 401 plan. You heard from Robert earlier today about the investments we're making in our Target Date capabilities. This franchise continues to be a very important part of our organic growth and contributor to our 1%-3% long-term goal. Our decision to update the pricing for our Target Date suite, as well as expand our blend capabilities, reflects the continued investment in the business for growth. As I've spoken to about in the past, we regularly review our fees to ensure that we continue to be competitive across our capabilities. While this decision stemmed from this ongoing review process, we certainly recognize that it's the largest investment we've made. That said, our industry-leading margins allow us to share some of the benefits of scale with our clients and reinvest these scale efficiencies for growth. Pricing remains critical in the defined contribution channel. This change of 6.3 basis points in our funds and 4.8 basis points in our trust will position us very well relative to both active and passive peers, helping us maintain our leadership position in this growing market. Turning over to expenses. Just as a reminder, we updated our non-GAAP operating expense guidance for 2021 to 10%-14% in our first quarter release. This change was to reflect the rise in our market-driven expenses, which represent about 30% of our expense base. In 2021, we are continuing to make investments across the firm to position us for sustainable, diversified, long-term growth. A few areas to highlight. This year is the final year of ramp-up and expenses related to the hiring needed for the creation of Turbo. As you heard from Rob, we are on track with our plans both from a talent and a technology standpoint. This year, we will also incur non-recurring transition costs related to the Retirement Plan Services transformation and our expanded relationship with FIS. However, these costs are already included in the expense guidance that we have given. We also continue to invest in our front, middle, and back-office technology, including enabling capabilities like Turbo or the use of augmented intelligence and data analytics for investments that Rob mentioned earlier today. We are sometimes asked when or if the expense growth rate will decelerate. As you've heard me say in the past, I view our continued investment in the business as critical to driving sustainable growth, and we will continue to invest as we see valuable opportunities to do so. A few areas that I would highlight for 2022 and 2023. We will continue to invest in talent to support our expanded investment capabilities, including capabilities like ESG, impact investing, ETFs, liquid alternatives, or global multi-asset. We will also continue to expand our coverage in wealth management, invest in our vehicle expansion to best meet client needs, ultimately ensuring that we continue to develop lasting client partnerships. We will also incur some transition costs in 2022 related to our Retirement Plan Services transformation. Finally, from a corporate standpoint, we will be expanding our digital capabilities, continuing our front and middle-office transformation, and investing in our Baltimore and London headquarters. As we invest in the business, we also look for areas where we can drive efficiencies. Our partnership with FIS is a very good example of this. We will certainly benefit from their scale as well as greater automation. While we will incur some transition costs, savings will ramp up from 2022 onwards. We are also pursuing a number of efficiencies in our technology spend, including optimizing our application and data center footprint and digitizing client interactions. All of these efficiencies will allow us to reinvest across the firm. As always, we will adjust our pace of investment as needed based on the market environment. I'll close on capital management and M&A. Our approach to capital management remains unchanged. We are proud of the continued growth in our dividend, including our 2021 increase. We've continued to buy back our stock opportunistically, leading to an 8% decline in our shares outstanding over the last five years, repurchasing $4.2 billion at an average price of $95.71. Our balance sheet remains very strong, and we continue to actively deploy seed capital, which we view as a strategic advantage relative to our peers. Finally, a few thoughts on M&A. Our priority remains to grow organically in areas where we believe we have the capabilities to do so, and you heard today about the many investments we are making to ensure this. In parallel, we continue to selectively engage on inorganic opportunities, which would add capabilities to our platform. Alternatives is one example of that. As stated in the past, we remain uninterested in large, diversified deals to drive scale. It's also important to us that an acquisition align us with best-in-class investors and a similar culture while also not causing disruption to our existing businesses. In summary, we remain confident in our ability to create value for our stockholders over time by driving diversified and sustainable organic growth, maintaining strong margins, and providing very good returns of capital. Thank you for your time today. We will now shift to Q&A. Hi, I'm Linsley Carruth. I handle investor relations at T. Rowe Price. Thanks for joining us today. I'll be reading the questions you've been submitting to our speakers today. You can see in the lower left of your screen a box where you can submit these questions. We've had quite a few questions come in during the presentation, several of those related to our Target Date announcement earlier this week. I'm going to bundle together those questions and split them with our speakers into a couple different pieces. Bill, I'd like to start with you. There are a number of questions around the rationale and the decision and the specifics about the timing of it and why now. Sure. I'm happy to take that. Well, taking a step back, I think it's important to remember that T. Rowe Price was an early innovator in retirement portfolios. Over the course of several decades now, we have invested considerably in our teams and our capabilities, and we think that they're excellent. This business is important to us for a variety of reasons, most importantly, because it centers around retirement. As you saw in my slide on our vision, our goal is to be a global partner for investors in retirement. The vehicles that we have here are ideally designed to serve retirement-oriented investors. Long-term investment exposures, embedded risk awareness, thoughtful asset allocation, and all of that packaged really in a fee structure that's very modest. We think these are really good products for clients, and that's important to us. You also heard in the presentation, Rob talk about our performance. Our performance over essentially every rolling 10-year period has been outstanding, and that too is important to us. Why now for these pricing adjustments? We've concluded that these products are essential for our clients, that they're really good for our clients, that we have the skills and capabilities proven to deliver for these clients as well as anyone in the business, and it would be our goal to grow this business meaningfully over time on a global basis. We think that the pricing adjustments will generate growth and over the long term, be an NPV positive action for us. Right. Second part of the question, Rob, we're going to take to you, actually it's got two different pieces. If you could explain how T. Rowe Price compares to the passive players in target date, then second part of that would be anything around differentiation, particularly around have we considered embedding privates into our target date. Thanks, Linsley. I'd take a step back and just say that we contemplated the pricing changes from a position of strength. We are a scale player in the retirement date fund business. We think sharing some of the benefits of scale with our clients is the right thing to do. Our new pricing strengthens an already robust value proposition. I think that's the case whether you're evaluating T. Rowe Price retirement date funds relative to offerings that have primarily active underlying building blocks or offerings that have primarily passive underlying building blocks. We, as an investment management firm, are firmly committed to active investment management. Our approach to active investing, as my prepared remarks showed, has delivered better outcomes for our clients in the past, net of fees. I think in terms of our fees relative to passive, they're at a premium. We believe that kind of ultimately even net of those premium fees, again, we are able to deliver better returns and better outcomes for our underlying investors. Our fees are very competitive, and kind of ultimately, again, we think this is a great value proposition. Part of the announcement was that we are launching our blend strategies in mutual fund in late July available in the mutual fund vehicle. The blend strategies have been available in trust form for a couple of years. I think it is important to note that 40% or more of the blend strategies are also in active underlying components. What the blend strategies enable us to do, Linsley, is to reach a portion of the market where fees are a greater part of the consideration. At the end of the day, I think if you look at the competitive universe, we have to compete against both active and passive competitors. Passive pricing's come down pretty meaningfully over time, and ultimately, that's one of the important levers that they have to compete with. For us, we have pricing as a lever, but we also have the ability to generate differentiated investment outcomes through alpha generation and have demonstrated the ability to do that in the past. Thank you. The last piece of the bundled questions on Target Date, Céline, is for you. Could you address questions around what we expect for changes in flow patterns related to these changes? Sure. Linsley, I'll start just with a comment around how to think about the financial impact. Obviously this is a mid-year decision, right, effective July 1st. We will see half of the impact this year and then half of the impact next year. I would also mention that there is some offset in our AUM-driven expenses. From a flow perspective, obviously this is a growing category, a growing channel, one where we're a market leader and one where we think that this will continue to drive good growth momentum for us. As you can imagine, when you build a business case like this, there are a lot of assumptions that need to go into it. As Bill said, ultimately, we think that this is a positive NPV for us and one that will continue to help us with our long-term organic growth targets. All right. With that, we'll move on to some of the individual questions. Bill, we'll start with you with a question from Glenn Schorr at Evercore. You generate a ton of capital and have been smart and opportunistic at share repurchases over the years. Are there ways you could use the capital to accelerate organic growth? I do think that there are ways we could accelerate organic growth. As Rob Sharps began to talk about, and in Robert Higginbotham's presentation, he talked about a fair amount of new product pipeline, and the seeding for those products is rather substantial. We're using seed to help grow the business, and we're going to continue to do that over time. The question said that we had a very healthy cash flow generation. I would agree. It has grown significantly. We do return capital to shareholders as well. We have a long history, 35 years of dividend growth now with our 20% increase earlier this year, and we expect to continue that. We paid two specials in 2012, 2013. We regularly consider them, but we have a pretty high bar for that. I also think we followed through more or less on our pledge to continue to buy back stock opportunistically. Céline mentioned that we've retired 8% of our shares over the last five years, and that number is actually 13% if you look at fully diluted shares over the last five years. I think we've been pretty good about giving back capital to shareholders. Yet we find ourselves with a very strong balance sheet still, a relatively modest payout ratio, so a lot of financial flexibility. I talked about using capital to seed portfolios. We do have a robust pipeline, and we can talk more about that as we go. Those are the primary uses that I see for capital. All right, moving on. For Rob, from Brennan Hawken, given the risk of higher capital gains tax, what portion of your mutual funds are in retirement and non-taxable accounts? How are you preparing for a shift away from those structures if tax reform negatively impacts those wrappers? What high-level impact would you expect from such changes? As Bill mentioned earlier, retirement is an important part of our strategy. About 2/3 of our assets under management are tax-exempt or tax-deferred, with most of that being retirement-oriented. While there are a lot of different implications to the extent that we get increased capital gains taxes, much of our base of client AUM would be insulated from that. That said, we do have an important portion of our AUM and an important set of clients where after-tax returns are a consideration. We have rolled out, beyond open-ended funds, other vehicles and other ways to access our investment strategies over the course of the last couple of years. Model accounts and mission SMA being one of them, ETFs being another. We are working on a tax loss optimization strategy as well. There are a number of different ways that we can offer our alpha generation capabilities in vehicles and packages that are more tax aware or tax sensitive than the open-ended 40 Act vehicle. Okay. We'll move on. Bill, we'll start with you on this question, then follow up with Céline. William Katz from Citi asks, can you expand on M&A discussion, more interested in deals, and if so, top areas and how you think about financial constraints, how to reconcile against consistent capital return over time. Sure. As you heard Céline say in her presentation that we've used primarily organic growth to grow the business over time. I would say we are interested in inorganic growth, and we have been very active in recent years in refining where our interests lie and in reviewing possibilities there. Some of the things we look to do is to add new capabilities to what we do or add scale to areas where we are under scale, if you will. As you know, we strive really hard to be good investors, even great investors. We will be looking to align ourselves with other folks who have the same ambitions to be great investors. We want to align ourselves with cultures that align with our own as well. I think finally, we want to minimize the disruption, if any, on our existing business, and create value for our stockholders over the long term. That doesn't necessarily mean that we're looking for bargain basement prices and that sort of thing. I think what it means is we would look to do and associate ourselves with very high-quality investment organizations and to partner with them to grow for the long term. Céline, anything to add before we move on? I'm good. Great. Rob, we're going to come back to you and talk about TRPIM for a second. Greggory Warren from Morningstar asks, can you walk us through the decision to split the investment organization in two? What drove the move? Was it the ability to gather additional AUM by mirroring existing products that are closed to new investors due to size constraints? Is there a concern that separating the two units, you might lose some of the collaborative efforts that have taken place within and across the asset classes? I was going to ask for a little help in remembering all of the different components of that question to the extent that I don't address them. I'll just say at the outset that the goal of TRPIM was to evolve our organizational structure, to preserve our ability to deliver excellent investment results, and to sustain our culture. Very, very clearly. I would not characterize it as splitting the organization in two. The TRPIM folks will continue to be very much part of T. Rowe Price. I would view it as the creation of a new investment division. Second thing I would say is that the strategies and the investment professionals that ultimately were selected to join the new division were very carefully evaluated to make sure that we could sustain collaboration. U.S. High Yield is part of that, so you have collaboration between fixed income and equities. We have strategies that are up and down the market cap spectrum, as well as strategies that are across the style spectrum. I think there'll continue to be a tremendous amount of collaboration and insight generation embedded within TRPIM. For me, that was part of the design, and I don't think that that's a risk. It's something that we'll work very hard to make sure it continues to be a part of the investment approach within both TRPIM and within the strategies in U.S. equity that remain in TRPA. There was part of the question also that asked specifically about whether the motivation was to reopen strategies. I would say it's not. One of the goals was not to reopen any of the strategies. I think if you look at the six strategies that are going to TRPIM, three of them are closed right now. The others are strategies that we monitor from a capacity perspective. That said, it doesn't mean that they might never reopen. We don't have any current plans to reopen them. When I think about TRPIM, it will be important to us and to the associates that go to TRPIM, that TRPIM grow in time. We'll continue to use the same capacity evaluation framework that we've always used to determine whether or not a strategy should be open or closed. That really is kind of ultimately whether or not we think we're at a size from an AUM perspective and a market impact perspective to allow us to continue to deliver. To the extent that we don't reopen existing strategies, we certainly could launch new strategies out of TRPIM if that's the right fit. Our internal product group will continue to own the roadmap from a U.S. equity perspective. We'll evaluate whether a new strategy should come out of TRPA or whether it's better suited to come out of TRPIM. As I said, there are a number of parts of that question. Was there anything that I didn't cover? I think we covered most of the pieces. Thank you. Yeah. All right. We're going to switch gears, Robert. Linsley, I'd like to emphasize, reemphasize what Rob said about collaboration and culture. In establishing this new investment division, we were very careful about making sure that the culture of the company project itself into the new division. T. Rowe Price Associates and TRPIM have very strong cultures of collaboration and sharing best ideas. The leadership of both of those divisions have big emphasis on that. I think you'll hear that consistently over the next five years from us. All right, we'll move on to Robert. This is for you around ESG. Brian Bedell from Deutsche Bank asks, can you elaborate on ESG product launches? Do you see demand in the U.S. catching up to Europe, and do you plan to more aggressively launch ESG product in the U.S.? Do you think 401 plan sponsors will add ESG choices to their fund lineup sooner rather than later, given the reversal of the DOL restrictions on ESG from the prior administration? Sure. Thanks, Linsley. Thanks, Brian. I'll probably use Rob's tactic of making sure I've answered all the components of that as well if you don't mind when we get to the end. Look, I think the first thing I'd pick up on is Rob's comment, which is we can do whatever we like from a product strategy point of view, but the first focus we've had is making sure that ESG is fully and appropriately integrated throughout our investment platform, so that whatever we do in the marketplace, we do with real substance. I think there's been a lot of commentary around the marketplace as to whether ESG is being done fully and wholeheartedly or not, and we're keen to make sure that what we do is fully embedded and very substantial. That was the first part of what we were doing. Rob mentioned the RIIM model and our ESG research team. Once we've got that increasingly embedded, then we were able to turn our mind to product launches. The question's right from Brian that the first place we went to for that was our EMEA domiciled product ranges. Really, if we think about the stimulus for that, it was the SFDR regulation in the European Union. Which essentially has Article 8 and Article 9 products. Article 8 products are where we are essentially converting many of our existing strategies to what we are calling our responsible range, where we have fully embedded ESG within them. Then we're also looking for Article 9, which is what we call our impact products, which are more ESG oriented. We are in the process of converting a number of existing strategies. We've done some already, and we've got a full pipeline for the rest of this year and into next year to continue to convert products so that we are well-placed in the Article 8 responsible category. We also have already launched our first Global Impact Equity product, and we're looking at further impact products to make sure that we're in the Article 9 category. In terms of growth around the world, I would say yes, we do think that we will see momentum build not only into the U.S. but also into Asia-Pacific, and we have a set of plans and thoughts as to how we will make the most of that. As for 401 plan sponsors, I would say we have very engaging conversations. Clearly, there have been different elements of emphasis from U.S. government and regulators as to the degree to which ESG is going to be embedded within 401 plans. We remain very engaged with 401 plan sponsors and consultants. I think it's too early to say the degree to which that's going to significantly increase in the near term. We think we're well-positioned should that happen. Thank you. I think that covered all of the pieces and parts of the question. Rob, we're going to come back to you on fixed income. Chris Harris from Wells Fargo asks, what do you attribute the improved investment performance in fixed income to? How is the business positioned for a rising interest rate scenario? Yeah. There are two primary factors that have driven our relative performance within fixed income over the course of the last year. The first is that we were presented a tremendous opportunity in March and April of last year. There was a lot of dislocation and illiquidity in the fixed income market, and we were able to take advantage of that and add risk in a number of our strategies. That's paid off, obviously. The other thing I'd say more recently, so kind of call it within the last eight months or so, our portfolios have been positioned more short from a duration perspective. That's also been kind of, again, a generalization. We manage a number of different strategies, but kind of where we have discretion from a duration perspective, our perspective's been that we were expecting rates to increase. By virtue of being short duration, that's also been a boost to performance. In terms of how we're positioned going forward for rates to increase, I would say that our conviction probably a little less strongly or broadly held that rates will continue to rise. We've taken some of that short duration bet off. We also have a number of strategies that could thrive in higher or rising interest rate environments. I would point to strategies like non-investment grade that typically carry higher spreads and kind of ultimately have shorter maturities resulting in lower duration. Bank loan which is floating rate, and that we've got several short duration strategies. Short-Term Bond, Ultra Short-Term Bond. We've launched a new Short Duration Credit strategy. With a number of different offerings that are on the short end of the curve that could thrive in an environment where rates are rising. Great. Rob, if we could stay with you for a moment, but shifting gears to ETFs. From Dan Fannon at Jefferies, how much AUM is in non-transparent ETFs currently, and do you still see this as an incremental opportunity for growth, or will it cannibalize existing AUM? Yeah. Look, I think it's a great opportunity for growth. The ETF as a vehicle, is a vehicle that has grown tremendously. It's largely been in transparent form. A lot of passive and some factor-based strategies, as well as active fixed income. Last summer, we launched our first three ETFs in semi-transparent active form, which is a culmination of a lot of work over a long period of time engaging with the SEC. We've been super pleased with regard to how they've performed. They've traded at very tight spreads, and are developing interest. The absolute AUM level is still small. It's just under $300 million as it stands today. From a market share perspective, in terms of semi-transparent active, I think we're more than holding our own. I think it's important to remember that this structure is less than a year old. I do think that in time it will prove itself out. I think it will allow us to reach a number of financial advisors and intermediaries that focus on the ETF as a vehicle. Through some marketing with ETF Trends and some engagements with our intermediary distribution folks, I think we're already starting to meet some of those. Ultimately, this will really grow once it's adopted by some of the big financial advisory or broker-dealer platforms. I think we're going to need kind of at least a one-year track record with regard to performance. For us in terms of ETFs, I think we expect to launch another semi-transparent active ETF later this year, as well as transparent fixed income ETFs. Our product group and investment division is developing a longer-term roadmap with regard to what strategies we're going to offer in ETF form. Thank you. Robert, we're going to come back to you on China. Michael Cyprys from Morgan Stanley asks, on China, how are you thinking about the strategy for onshore distribution? What's needed to win in that marketplace? How do you think about opportunity for extending into wealth management in China? Thanks, Mike. Thanks, Linsley. As I said in my comments, we announced the distribution leader to be located in China. We have had a long-term business in China with the large institutional clients there. It's been very successful for us. We've built long-term good relationships with our team based out of Hong Kong, but a lot of time in the country. We've also, as I think you will have seen, opened our first office in Shanghai initially for our investment research team. Ultimately, I think the success in China is going to be driven by the same as the success almost in any other jurisdiction, which is first and foremost, can we deliver investment excellence in products and in investment strategies that are relevant to the clients? We think that will start with the institutional clients we already have, broadening out possibly into the insurance industry as well as into the sort of high net worth and ultra-high net worth wealth management segment. We'll work with our new distribution leader to formulate the plan for our onshore distribution business in China over the course of the next year, and we'll be in a good position to update you more when we get together early in 2022. Thank you. Céline, we're going to move on to you with two questions on expenses that are kind of similar, so I'm going to read them both together. First from Alexander Blostein at Goldman Sachs. Expenses. Based on the investment initiative outline, how does your non-market related 2022, 2023 expense growth outlook compare to growth we have seen over the last several years? Then on a similar line, Daniel Fannon from Jefferies asks, several years ago, you provided a multi-year outlook for expense growth. The comments today imply an ongoing level of elevated spend. What would that chart look like today? Will future inefficiencies reduce the overall growth rate of expenses? Yeah. Thank you for your questions. Obviously, we have not given guidance for 2022 and for 2023. As you saw in today's presentation, and as we've also spoken about in the past, we intend to continue to invest in the business for long-term sustainable growth. I think when initially T. Rowe went through the ISP, the Integrated Strategic Plan, and came out with the presentation of it, that was for a certain period of time. If you think about what's happened over the last few years, our industry continues to be a very dynamic one with a lot of changes happening. We see new opportunities come up that we want to invest in. For instance, as Robert was just talking about China, as Rob was just talking about ETFs, as we've spoken about earlier in today's presentation, ESG. There's a series of things that we think are good things to do and good things to invest in for the business and for our long-term success. We'll continue to do so. Now, as I also said today, we try to do that in a way where we also find efficiencies to reinvest in the business, so to offset some of that growth. As you know, we try to be mindful of what's the market environment that we're in. Over the last few years, the market has been very supportive, and it's allowed us to invest in the business and also maintain strong margins. We'll continue to remain aware of what the environment that we're in as we modulate that growth over the next few years. All right, Bill, we're going to come back to you on M&A. Patrick Davitt from Autonomous Research asks, on the M&A point, would you consider doing a large-scale alternative deal? Good question. I'm not sure what large scale means in this context. I would reiterate that we have very significant financial flexibility with our balance sheet. We like to keep financial flexibility with our balance sheet, and in all likelihood wouldn't put that at significant risk. I would say things that are small enough to allow that to happen would be within our scope for sure. All right. Moving on, this one's for Bill Stromberg and perhaps Céline Dufétel as well. Rob Lee from KBW asks, on capital management, with $6 billion of cash and investments, including seed, what is the minimum operational liquidity you target, and how do you derive it? Also, in the past, you paid special dividends. If taxes were to rise, would you consider a special dividend as a way to efficiently return capital to the investors? I'll start. I think the assessment of our balance sheet is accurate. We have paid specials in the past a couple of times. We are cognizant that there's a potential for tax rates to rise, and it is part of our thought process, and I would say part of our regular discussions with our board of directors. It is something we've done before. It is something we would consider doing again under the right circumstances. Under the right circumstances would mean that we don't have better uses for that capital in the relatively near term as far as a special. The second part of that question, Linsley, was? Sorry, I'll have to come back to it in just a moment. I think, Bill, it was a level of liquidity, a minimum level of liquidity, and how do we derive that? Right. Obviously our business has robust cash flows, and we could support even taking that cash all the way down and having some debt at some point. We don't think that's a wise thing to do at this point in the cycle. I wouldn't say there's a minimum level of liquidity because this kind of business can support more leverage than we carry today, and significantly more if we really needed to do that for some reason. All right, we're going to come back to Target-Date for a little bit. Emme Kozloff from Capital asks, what do you expect the growth rate for the Target-Date business to be going forward? You highlighted in your slides a 4.8% growth rate for active and blend for the industry from 2017-2019. Do you expect the growth rate to be similar or lower over the next few years? I believe these were from your slide, so perhaps we could start with you. Yeah. I wouldn't pinpoint to a specific number. It's obviously a very good question and a very important question given how important the franchise is for us. Our goal is to maintain our overall leadership in retirement. That's why we're investing both from a pricing perspective, but also with just the suite of products that we have and making sure that we're able to meet various client needs and meet those evo lving needs, right. Be able to continue to compete in all the various ways and the various capabilities that our clients are looking for. We think that that'll support the growth of the franchise. Our goal overall is to maintain our overall leadership, and we think that we're well-positioned to do so with the changes and the new capabilities that we're adding to the platform. I would just add Linsley quickly here that the Target-Date fund business got a meaningful boost from the Qualified Default Status. I think that's largely run its course. I think if you look at demographics among 401(k) plan participants and think about the maturity, if you will, of the Target-Date fund business, it's pretty reasonable to assume that it will grow less rapidly going forward than it has in the past. That said, I think our goal clearly would be to sustain or grow our market share. I do think that given the maturity and given the demographics among 401(k) plan participants, the growth rate going forward is likely to be modestly slower than what it's been historically. All right, Robert, we're going to come back to you. Another question from Rob Lees at KBW. In APAC, it seems that Australia, Japan, and Greater China are each a key focus, but where in EMEA is the focus and which markets hold the most promise? Also, would you consider M&A outside the U.S. to gain product or distribution capabilities? Sure, Rob, thanks for the question. Your description of our Asia-Pacific business is right. It's pretty well- balanced across those three sub-regions that you talked about, as well as pretty well- balanced both institutionally and intermediary. We talk a lot about diversifying our business, but that really is the goal, and that's what we've aimed to achieve, and we feel we have achieved in Asia-Pacific over and above just the net organic growth rate. In EMEA, we reviewed our business in EMEA fairly recently, we think that we've essentially got three foundational or really focused markets. They are the U.K., Germany, and Italy. We also have a broad footprint across most of the rest of EMEA, from the Nordics through the Netherlands, Belgium, Luxembourg, down into Spain, Switzerland, as well as other countries. We also think those countries have provided and can continue to provide interesting both diversification and growth. If your question is about where is the focus within Europe, it would be primarily U.K., Germany, and Italy. All right. Robert, we'll come back or stay with you, and probably for Rob as well. Michael Cyprys from Morgan Stanley asks, as you look across your firm, what product gaps or distribution gaps remain at this point? How do you think about filling those in? Where do you perceive yourselves to be under scale? I think we need to think about product as a combination of vehicle and underlying investment strategy. Rob may well have perspectives on both, but I'll talk initially about vehicle. We've talked in prior years about our vehicle build back. Clearly we've long term had a U.S. mutual fund business. As the question referred to earlier about potential tax changes, we've spent a lot of time building out alternative vehicles in our U.S. business, whether that be moving from funds to trusts, which is a trend you will know well, and we've talked to you often about, but also Rob will have talked about ETFs, but also we have model delivery, retail separately managed accounts. It's about making sure that our investment capabilities are available to our clients in whatever is the most appropriate vehicle for them and their needs, given their personal financial situation. We've also built out over time our Canadian pooled pension fund business. Our Canadian business is now an increasingly significant part of our diversification away from the U.S. We've also, over time, built out our Luxembourg product range from originally one core SICAV vehicle to now a number of different vehicles hubbed out of Luxembourg. We've recently also launched a Cayman vehicle for our more illiquid alternative strategy that we may come on to talk about. We launched our U.K. OEIC five years ago, which is now scaling nicely. We have Australian unit trusts. Rob mentioned our investment trust vehicle in Japan. We think we've now got product platforms and vehicle delivery platforms in pretty much all of the key areas that we think we'll need to support the distribution strategy we've got. From an investment strategy point of view, the one thought I would leave you with before Rob maybe adds some comments is, the single biggest category for us that can reach across multiple jurisdictions is global, and we do think that's where we have the scale of investment platform and product platform to be able to deliver that in a way that is compelling for our clients and we think really supportive of our long-term business growth. Whether that be in fixed income or in equity, we've put a lot of effort into growing out those global capabilities to make sure that we've got a long runway of strategies available in different vehicles. That's where we think we've got good growth potential going forward. Rob, anything you'd add either on the vehicle or on the investment capability side? Yeah, Robert, thank you. A handful of things I would add. It's a pretty broad-ranging question. I think we have scale or are in a position to scale equity strategies globally, whether it's multi-region, whether it's regional, whether it's country-specific, whether it's in the U.S. I think we've been diligent from a product development and a capacity management perspective and have delivered performance. Again, I think for the most part, we are scaled or have strategies that put us in a position to scale across most of the opportunity from an equity perspective around the globe. Within fixed income, I think there are areas where we have tremendous capacity to scale over time, and I would cite most areas outside of non-investment grade. Core, core plus, when you expand that to global, Global Multi-Sector, global even in non-investment grade with Global High Income or European high yield, we have potential to scale. We've actually included, in past investor days, a slide that basically discusses high-performing strategies with a lot of room to grow. We omitted that this year, I can give you just quickly an update. I would say that we've been really effective at scaling a number of strategies that were displayed on that slide. In fact, a number of them have doubled in the last year. Partly through organic growth, partly through market appreciation, partly through alpha generation. Both of our Global Growth Equity strategies have doubled in AUM. Our Japan equity strategies doubled in AUM. Within fixed income, EM Corporate, Global High Income, Ultra Short, as well as U.S. High Yield. We've been, I think, very effective at scaling those strategies that we featured last time to the extent that some of them probably would have to come off the slide because of capacity considerations at this point. Most of what was on there before would remain on. I would say that it also could be augmented by new strategies, things like Global Value, Multi-Strategy Total Return, or Total Return within fixed income. All right, Rob, we'll stick with you for a moment- Go ahead. Go ahead. No, go ahead. Please finish that question. We can come back to it later. Go ahead and ask the question. Thank you. Okay, we're going to switch gears to ESG for a second, Rob, we're going to stick with you. This is from Richard Manuel at Columbia Threadneedle. You discussed increased integration of ESG into your investment vehicles. Can you elaborate on what exactly you are doing in that regard? If you have looked at how third-party ESG ratings view T. Rowe, what do you think of these scores relative to how you perceive yourself on ESG factors? Are there particular areas where you hope to improve your ESG weakness to the degree there are some? Yeah, look, I think the demands from a client perspective with regard to ESG continue to rise. I think we continue to invest in order to meet those demands. Ultimately, I think we're interested in making sure that there's better development of standards with regard to disclosure and data to help inform those decisions. In terms of what I think of the external ratings, I think they take very different frameworks and very different approaches. We've been A+ from UN PRI for the last couple of years in most of the modules where we compete, which we're quite proud of. Our teams put a tremendous amount of work in. Morningstar just came out and rated us basic, which doesn't feel very good. When you look at the criteria that they use, it's probably the right landing point for where we are. I think in order to move up, there are a number of things that we need to do. I think we've got to ultimately evaluate whether those are consistent with our broad strategy and in the interest of the broadest base of client opportunity that we're trying to address. In terms of specifically what we've done, I talk a lot about the RIIM model. I think we've defined or refined and developed the RIIM model. Our investors are much more familiar with it now. I think they are informed in terms of where they probe and how they augment their fundamental process with information that comes from our responsible investing team as well as from the RIIM model. I think we've increasingly engaged with companies that we invest in or companies that we're doing diligence on factors that are ESG related. I think there's a very thorough body of work that has gone into ESG integration. I think it's very authentic, and I think it's very rigorous. Thank you. Bill, we're going to come back to you and step out a bit on culture for a moment. Rob Lee from KBW asks, given the importance of culture, how do you maintain that as you have accelerated global expansion, and what specific tools or strategies do you use to sustain it? It's a great question. We started our global expansion in earnest, if you will, at some time around the turn of the century, 2000. The way you prolong that or promote that culture across the globe is to hire, develop, promote, retain, and even fire with culture in mind. That means we want individuals who are willing to share their best ideas, collaborate with their peers, and to drive the organization forward in that regard. By and large, we built the organization organically, brick by brick, so that we could do that. I think we feel very good about the global investment platforms in equity and increasingly across fixed income and their ability to collaborate, as Robert talked about on our global strategies. We continue to do that. We're going to do that with TRPIM. I think we're off to a really good start from a culture standpoint on TRPIM. I feel like we've done it to this point, and I feel like if we take another step, we can continue to keep culture front of mind as we do it. All right, Robert, we're going to come back to you on retirement and 401. I've got two questions, but I'll read them individually. The first from Craig Siegenthaler at Credit Suisse. I have a question on the 401 business. How are industry net flows trending given more challenging demographics, and how has T. Rowe Price's market share trended within the 401 channel over the last year? I think in a way, Rob covered that pretty nicely earlier when we talked about Target Date, particularly. Clearly, retirement continues to be a significant opportunity. We do think there is some growth left in it, albeit probably maturing, not least of which because of underlying demographics. That in terms of for our business, clearly presents some potential at a net growth market level. We think within any market, there is also a market share game. If you think about our retirement date business, when we first started, we essentially had one glide path available in one vehicle with one flavor of active management. We now have different flavors available because the market has become a lot more sophisticated in its demands. We think we've got the broadest range of franchise to be able to respond to that, both for any net opportunity out there, also with any market share opportunity. That's the context within which it's really, really important to look at the changes we've made on pricing recently. The other thing I'd say is we continue to engage with regulators. You may well have seen recent announcement about the bill going through the Senate. We're generally supportive of that. We think that'll be supportive of retirement in the U.S. long term. We think it'll encourage plan sponsors and employers to look more at auto-enrollment. We think it'll help older retirees invest more and stay invested for longer. We think it will enable 403 plans to get the benefits that 401 plans have been able to have by investing in trust-based vehicles. We think it will also enable participants to engage more in the 401 market through improved disclosure. We think there's net growth still. We think there's still an attractive market to gain share with a really compelling broad and high-value proposition. We think that working with regulators, we can continue to support the future of the U.S. retirement business. All right. Robert, sticking with you on a similar topic, Michael Cyprys from Morgan Stanley asks, you mentioned the retirement opportunity in decumulation. I'm hoping that you could elaborate on how you think about addressing that opportunity. In what scenario could it make sense to partner more closely or acquire an insurance company to offer innovative disruptive retirement products? Firstly, I think it would be a mistake to view decumulation as simple, if I can use that word, because accumulation is not simple. I've talked about the scale and breadth and complexity of the range that we've developed over the last two or three decades. There is clearly in accumulation with the QDIA, there is a common bond that essentially anchors the accumulation phase in a particular structure. In decumulation that exists far less. People can stay in plan, but they can also move out of plan into a broader wealth management solution. We would say one of the first things we can do is to have a very broad distribution franchise, because by doing that, no matter where people move their assets as they get into decumulation, we will be able to be there to help them. If we assume that they move into some form of very highly structured decumulation product, we already have our Retirement 2020 income product. I talked about the fact that we're also looking at more personalized glide path solutions as people get towards the end of their accumulation phase, so that they can build a portfolio that takes them through retirement that is more personalized than a more standard QDIA fund. Also the question talked about whether there's opportunity to link up with insurance. We are fortunate enough to work with some of the largest insurers in the U.S. for many, many decades. With those relationships, we think there is opportunity to bring together the benefits of real returns from asset management, but also with some of the security and longevity protection features of an insurance contract. All right. Next question is probably going to have answers from a couple of you on alternatives. Chris Harris from Wells Fargo asks, you mentioned growing interest in alternatives. What is T. Rowe Price doing to grow into this asset class? Is that a Strategic Plan priority for you? Rob, should we start with you? Yeah, Linsley, that's actually where I was headed at the end of the question with regard to where we don't have offering or where we're subscale and the two other more obvious areas would be multi-asset and solutions outside of Target Date funds, where we've invested quite a bit and where we have some momentum, but I think we have very long runway, and alternatives. Alternatives are a pretty broad category. I'll talk both about illiquid alternatives as well as about liquid alternatives where the underlying investment is in public markets. I'll start there because that's an area where we've been working from a development perspective and building investment track record for probably close to a decade. We're in market with a suite of dynamic fixed income strategies that I think are fairly characterized as liquid alternatives, Global Dynamic Bond, Global Dynamic Credit, Global Dynamic EM Bond. We also have a multi-strategy offering in 40 Act form, and each of the underlying strategies there could be considered a liquid alternative. They've been seeded separately and have separate composites, and in time, we will evaluate whether or not we launch those commercially on a standalone basis. Last thing I'd say is that we've also developed a compelling track record in a private fund that invests in liquid securities that from a compliance perspective, I really can't speak to. I think there's a lot going on, and we have a big opportunity in front of us in the liquid alternative market. There's obviously tremendous growth in the illiquid alternative part of the market as well. Private markets across private credit, private equity, real estate, infrastructure, et cetera. I think expertise and being very robust in that part of the market is a somewhat different skill set than investing in publicly traded securities and liquid securities. There's also potentially some inherent conflict. As a result of that, I think to the extent that we want to address that part of the market, we'd have to do it outside of the core T. Rowe Price platform, whether that means through doing something organically outside of the T. Rowe Price platform, doing some lift outs or doing acquisitions. I think I'll turn to Céline to talk a little bit about our framework for evaluating the inorganic approach to illiquid alternatives. Thank you, Rob. As Rob mentioned, it's obviously an area of tremendous growth, and it is one that is an area of interest for us and that we've studied carefully. As Rob mentioned, the capabilities are different, the skill sets are different. We've done some work around the space just to think about what those areas of interest could be for us and also where we could add value to a firm joining us. I'd probably put private credit fairly high on that list as being an area that could be of interest to us. There are many subcategories within the illiquid alternatives world, whether it's private equity solutions, the secondary space, real estate, infrastructure. Really there could be various areas that could be of interest over time. I think I come back to the principles that we laid out in terms of aligning ourselves with great investors and making sure that there is a very good and very strong cultural fit, as well as obviously value creation for our stockholders over time. Two more things I'd add there, Linsley, before we move on. One, we already invest in private placements in a very substantial way across a number of our existing strategies. We continue to invest in our ability to do that, and they've been additive to our investment performance. I also didn't address, there was an earlier question with regard to whether or not we would consider private investments in our Target Date funds as a means of differentiation. I can tell you, we've received a number of calls from PE firms and other folks that would love to partner with us. We've seen very limited interest from plan sponsors and from clients to incorporate illiquid alternatives into the underlying targeted offering. It's not to say it might not happen in time, but I think given the need for daily liquidity, daily pricing, and fee sensitivity broadly in the 401(k) market, we just don't see a lot of appetite among our client base to incorporate private alternatives in either our Target Date funds or any of the other offerings that might be made available to participants on a 401(k) plan. Rob, staying on that theme for just a moment. Rob Lees from KBW asks, I have to ask the inevitable digital asset question. How do you think of incorporating digital assets, not just crypto, into your multi-asset strategies, and what digital asset innovations are you most intrigued by and focusing on? We spend a lot of time thinking about cryptocurrency and a lot of time thinking about what the implications of blockchain might be for the business models of a number of companies that we invest in, whether from an equity perspective or a credit perspective. We've come to the conclusion, at least in the interim, that we're going to see a couple more cards played with regard to crypto before determining whether or not it's appropriate to integrate into any of our multi-asset offerings or to develop a standalone offering within cryptocurrency. The reason for that is, one, I think there's likely some regulation coming that would provide a lot greater clarity with regard to what the right approach would be. Second, I think we're still working very hard on exactly what the underlying investment thesis would look like for various cryptocurrencies. I think there's a broad range of perspectives, but I think we've not come to a conclusion that we have a real robust investment thesis behind offering or incorporating cryptocurrencies or frankly, other digital assets broadly onto our platform. Thank you. We'll switch over, and this is probably for both Céline and Robert on flows and seasonality. Patrick Davitt from Autonomous asks, you mentioned more institutional and non-U.S. wins as helping take some of the legacy seasonality out of your flows. Could you frame how the pipeline looks there broadly relative to, say, year-end, year-over-year, and then perhaps even a few years ago when you were less institutional? Robert, do you want to start? Yeah. Look, I think ultimately people are looking to give us some sort of indication on flows. That's not sort of the thing that we talk about openly. We feel good about the pipeline. We monitor it carefully. We think we've got some interesting things. We're not going to go any more specific than that. Céline, did you want to add anything else, or should we move on to the next question? I think we can move on. I would just echo what Robert said. I think there's no major change in the momentum. We continue to see good demand for our strategies, and our pipeline of institutional demand is not significantly different to what it's been in the most recent past. All right, Rob, we're going to come back to you on ESG, more on the integration process. Another one from Rob Lee at KBW. How are your PMs and analysts engaging in the ESG process and their security selection? What role do they play? In terms of what role they play, ultimately it's up to them to incorporate ESG into their security selection and portfolio construction process, right? The role that they play is essential. It's difficult to generalize. I'd say that there are some portfolio managers that are still coming up the curve and that are still being educated and ultimately working on their approach to integration. There are others where it's been deeply integrated since before we brought Maria Elena Drew on and formally established our responsible investing team. Again, I'm not sure exactly how to answer that question other than to say that our RIIM model rates all of the securities that are being evaluated by our portfolio managers. Our portfolio managers and fundamental research analysts are informed by the RIIM model scores. We have a responsible investing team across asset classes that the fundamental research analysts, as well as the portfolio managers, can engage with to discuss ESG factors. Ultimately, if there's something that they're genuinely interested in learning more about or influencing, we have an engagement with the underlying company. I think beyond that, this isn't rocket science. It's another form of research, it's basically looking at and evaluating a different set of criteria in a more fulsome way. Look, ultimately, these things have always been considered, right? If you're an analyst and you're analyzing energy, environmental risk has been part of what you've looked at for a long period of time. I think there's more and more data that's available now, as more data becomes available, I think you can determine whether or not it's useful and whether or not it should be incorporated into your process. All right. Just a couple more questions. Robert, we're going to come back with a specific question on China for you from Craig Siegenthaler at Credit Suisse. You two are interested in starting a fund management company in mainland China, especially now that you can own 100% of this venture, given deregulation trends. We have an entity in China now. We had it formally opened in March. It's an investment entity. It's an unregulated, wholly foreign-owned entity or WFOE. I think one of the benefits that we've had by being a very keen watcher of China for the recent years is that we have a clear view now, I think, of how you can go about building the various entities and what those entities enable you to do onshore in China, whether it be a PFM or an FMC. All of those are part of the plans that we'll be working on now with our new head of China distribution. As I said, we'll probably be in a good position to update you either through regular calls that Céline will have with you or in this sort of format by this time next year. All right, one on the recent retirement legislations from Macrae Sykes at Gabelli. Can you talk about which potential retirement legislation changes have the most chances to be passed? Do you expect any major innovation in current structure over the next 10 years? I'm not going to predict which ones get passed. Clearly, there's a process. We think that the current regulation that I referred to has been well put together with pretty good bipartisan support, and we would just encourage everybody to review that, get behind it. We think it's good ultimately for U.S. retirees and for the U.S. retirement business, and we're supportive of it. We wish it the best as it has its passage through Congress, and we will look forward to the outcome and encourage people to take a good bipartisan approach to making sure that happens. All right. I think we'll make this our last question. John Fox from Fenimore Asset Management asks, what were the changes made in 2019 that impacted the intermediary flows? Robert, I think that's for you. Yeah. I am not sure specifically which changes may be referred to, but generally, I would say that what we have done on our distribution build-out from 2019 and beyond, but even prior to that, we have talked about, and I think I showed in my slides, the growth, particularly in the U.S., of our broker-dealer build-out. As we have gone from a smaller number of territories towards hopefully by the end of this year, around 50 territories. We think that gives us a scaled, mature, broad coverage of the whole of the U.S. business. I also referred when I mentioned the EMEA flows, even in Q1 2021, that whilst we had seen an institutional outflow that had offset a number of other good things going on in EMEA, our underlying intermediary flows quarter-on-quarter for several quarters had been consistently strong. I would put that down to the fact that we started that build-out four or five years ago in the U.K., Italy, Germany, as well as Spain, Switzerland, and a number of other locations. We've had those people on the ground now. We've had products now with good track records. Bill referred to the strength of our balance sheet in seeding our products. All of that, I think, has essentially meant that we've got the traction in recent years from the investment we put in, really from 2013, 2014 onwards. Our business in Asia-Pacific, I talked about our Australia business at long-term being one of our successes, and we'd invested more in the intermediary business there. More recently, particularly 2019, 2020, and into this year, we've seen particular strength from our intermediary business in Japan, leveraging what Rob referred to earlier as our investment trust product. It's really been pretty broad-based and has been benefiting from the investment that we've made over the last five or six years in vehicles, investment capabilities, and people. I apologize, we're going to slide one more last question in for Rob on ESG and close on that one. Emme Kozloff from Capital asks, what is the AUM of your ESG product today, and what type of growth do you expect from those flows going forward given your investment in it? That probably is better directed at Robert, actually, I think. In terms of the AUM and ESG strategies and what the forecasted growth looks like. The forecasted growth will come from two sources. One, we will be converting a number of our existing SICAV and OEIC products in Luxembourg and in the U.K. from two being essentially what we are calling responsible products, where ESG is very clearly embedded in the investment process. That will clearly provide additive ESG-related AUM, even if some of that is a conversion. Some of that will also come from new growth that we are confident about and have seen over the last year to two years, but we think will continue forward, whether that be in our responsible Article 8 products in the European Union or our impact products. We're not going to provide specific forecasts as to what we think that can be, but we think it'll be an increasingly good proportion of our business in European Union. The question asked earlier about whether we saw that expanding to other regions of the world, and we think, yes, and we think we will get more momentum in both Asia-Pacific and in the U.S., building on some of the same underlying investment strategies. Well, with that, I want to thank our speakers for the time today and for all of the people who joined us for our first Virtual Investor Day. Thank you for bearing with the technology in our first try at virtual. We hope next year when we're able to do this again, that some of us will be back in a room in person. Thank you for your time today.