SICAV

Emerging Markets Bond Fund

Active investment in mainly sovereign emerging-market bonds.

ISIN LU0207127753 Valoren 2026979

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

0.37%
$273.1m

1YR Return
(View Total Returns)

Manager Tenure

-6.57%
15yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.32
3.24%

Inception Date 31-Dec-2004

Performance figures calculated in USD

Other Literature

30-Jun-2020 - Michael Conelius, Portfolio Manager ,
The impact of this health care crisis has weighed on fundamentals in emerging markets; some more fragile countries are likely to remain impaired, but most countries should weather the storm and continue to gradually recover. Despite the significant rally so far, valuations are still compelling. As a result, we have positioned the portfolio for a continued rebound. However, we are conscious that positive technical factors are moderating and are ensuring adequate liquidity in the portfolio.
Michael J.  Conelius
Michael J. Conelius, Co-Portfolio Manager

Michael Conelius is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Conelius is lead manager of T. Rowe Price's Emerging Markets Bond Strategy. He is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price International Ltd.

 

Strategy

Investment Objective

To maximise the value of its shares through both growth in the value of, and income from, its investments. The fund invests mainly in a diversified portfolio of bonds of all types from emerging market issuers.

Investment Approach

  • Focus primarily on sovereign debt.
  • Integrate proprietary credit research and relative value analysis.
  • Establish independent credit rating at the country and corporate issuer level.
  • Add value through active country allocation and individual security selection decisions.
  • Limit risk through diversification.
  • Employ long-term investment horizon.

Portfolio Construction

  • Diversified portfolio structure: typically 200-300 securities
  • Duration bands: managed within +/- 1 year of the benchmark
  • Average credit quality: BB
  • Country exposure will range between 0% and 10%
  • Expected tracking error: 200-400 bps

Performance (Class I)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Since Manager Inception
Annualised
Fund % -6.57% 0.37% 4.25% 4.87% 5.90%
Indicative Benchmark % 0.49% 3.60% 5.30% 6.03% 6.83%
Excess Return % -7.06% -3.23% -1.05% -1.16% -0.93%

Inception Date 31-Dec-2004

Manager Inception Date 31-Dec-2004

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Data as of  30-Jun-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % -6.57% 0.37% 4.25% 4.87%
Indicative Benchmark % 0.49% 3.60% 5.30% 6.03%
Excess Return % -7.06% -3.23% -1.05% -1.16%

Inception Date 31-Dec-2004

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Data as of  30-Jun-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 07-Aug-2020 Quarter to DateData as of 07-Aug-2020 Year to DateData as of 07-Aug-2020 1 MonthData as of 30-Jun-2020 3 MonthsData as of 30-Jun-2020
Fund % 1.74% 5.63% -2.76% 5.05% 12.44%
Indicative Benchmark % 1.32% 5.08% 2.18% 3.51% 12.26%
Excess Return % 0.42% 0.55% -4.94% 1.54% 0.18%

Inception Date 31-Dec-2004

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Performance figures calculated in USD

Past performance is not a reliable indicator of future performance.  Source for fund performance: T. Rowe Price. Fund performance is calculated using the official NAV with dividends reinvested, if any. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. It will be affected by changes in the exchange rate between the base currency of the fund and the subscription currency, if different. Sales charges (up to a maximum of 5% for the A Class), taxes and other locally applied costs have not been deducted and if applicable, they will reduce the performance figures. 

Where the base currency of the fund differs from the share class currency, exchange rate movements may affect returns.

30-Jun-2020 - Michael Conelius, Portfolio Manager ,
Emerging market debt generated strong returns in June, climbing amid increased demand for yield, continued global economic stimulus, and optimism about a robust global economic recovery as nations reopened for business. Gains were tempered, however, by escalating tensions between the U.S. and China. Within the portfolio, our overweight allocations to high-yielding frontier markets such as Sri Lanka, Ukraine, and Mongolia were beneficial. Increased appetite for risk and demand for yield supported their recoveries from oversold levels. Our underweight allocations to lower-yielding Philippines, China, and Peru also aided relative results. In contrast, our Venezuelan holdings hindered relative results, as their sanctioned bonds rarely trade. An underweight allocation to lower-quality oil exporter Angola also held back returns amid relatively steady oil prices and increased demand for high yield assets.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 33.09% Was (31-May-2020) 33.59%
Other View Top 10 Issuers

Monthly data as of 30-Jun-2020

Holdings

Total
Holdings
185
Largest Holding Petrobras Global Finance BV 3.15% Was (31-Mar-2020) 4.38%
Top 10 Holdings 23.16%
Other View Full Holdings Quarterly data as of 30-Jun-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating B A
By % 9.49% -12.53%
Fund 32.28% 4.31%
Indicative Benchmark 22.79% 16.85%

Average Credit Quality

BB-

Monthly Data as of 30-Jun-2020
Indicative Benchmark:  J.P. Morgan Emerging Markets Bond Index Global Diversified

Sources for Credit Quality Diversification: Moody's Investors Service and Standard & Poor's (S&P) split ratings (i.e. BB/B and B/CCC) are assigned when the Moody's and S&P ratings differ. Short-Term holdings are not rated.

Maturity View maturity analysis

  Largest Overweight Largest Underweight
Maturity Cash Equivalents 3-5 Years
By % 9.01% -6.17%
Fund 9.01% 9.71%
Indicative Benchmark 0.00% 15.88%

Weighted Average Maturity

12.43 Years

Monthly Data as of 30-Jun-2020
Indicative Benchmark:  J.P. Morgan Emerging Markets Bond Index Global Diversified

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration Cash Equivalents 1-3 Years
By % 8.76% -11.11%
Fund 8.76% 4.84%
Indicative Benchmark 0.00% 15.95%

Weighted Average Duration

7.19 Years

Monthly Data as of 30-Jun-2020
Indicative Benchmark:  J.P. Morgan Emerging Markets Bond Index Global Diversified

31-Mar-2020 - Michael Conelius, Portfolio Manager ,

We are overweight countries pursuing reform agendas that target long-term growth.

Brazil

Brazil remains our largest overweight. We added to our overweight throughout the quarter, with a preference for bonds from quasi-sovereign oil company Petrobras as the company continues to improve its credit profile and maintains implicit sovereign support. We also added to corporate debt from issuers in consumer-oriented sectors that benefit from domestic economic recovery.

Mexico

Mexico remains an overweight in the portfolio. We do not hold any sovereign debt, but we find attractive relative value in quasi-sovereigns Petroleos Mexicanos and Mexico City Airport Trust and the deep corporate market as these issuers provide an attractive yield premium over the sovereign. �

Bahamas

We have added to our out-of-benchmark position in the Bahamas. The high-quality sovereign is supported by strong fundamentals and provides some defensive qualities as it is less widely held.

We remain underweight countries that offer limited risk-adjusted return potential.

The Philippines

We remain underweight the Philippines as its external debt provides generally uninspiring relative value due to its lower yields.

China

China remains a significant underweight. China's external debt consists largely of low-yielding, quasi-sovereign issuers with limited transparency and generally uninspiring relative value.

Saudi Arabia, United Arab Emirates, and Qatar

Saudi Arabia, the United Arab Emirates, and Qatar are recent additions to the benchmark, and we have deliberately not kept up with their growing weight in the index. In the last quarter, however, we slightly increased our exposure to this defensive area of the market. We added to Saudi Arabian quasi-sovereign Aramco and initiated a small position in Qatar government bonds. Our underweight to these higher-quality, low-yielding sovereigns is consistent with our structural underweight to such countries.

Sectors

Total
Sectors
4
Largest Sector Sovereign 60.48% Was (31-May-2020) 57.48%
Other View complete Sector Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Largest Overweight

Corporate
By16.58%
Fund 16.66%
Indicative Benchmark 0.07%

Largest Underweight

Sovereign
By-21.56%
Fund 60.48%
Indicative Benchmark 82.04%

Monthly Data as of 30-Jun-2020

30-Jun-2020 - Michael Conelius, Portfolio Manager ,
We are finding value in fundamentally attractive quasi-sovereigns and select corporates in mainstream markets that offer yield premiums over their respective sovereign. However, our corporate exposure has decreased recently. We maintained our local currency exposure at near zero as Emerging market currencies are likely to remain volatile in the near term.

Countries

Total
Countries
53
Largest Country Mexico 8.68% Was (31-May-2020) 9.14%
Other View complete Country Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

Largest Overweight

Brazil
By4.47%
Fund 7.47%
Indicative Benchmark 2.99%

Largest Underweight

Peru
By-2.75%
Fund 0.29%
Indicative Benchmark 3.04%

Monthly Data as of 30-Jun-2020

30-Jun-2020 - Michael Conelius, Portfolio Manager ,
We have positioned the portfolio for a potential continued rebound, but we are mindful around liquidity. We are focused on high-conviction frontier names that have been excessively punished, such as Ukraine, Argentina, and Ghana. On the other hand, we have reduced our exposure to more structurally vulnerable names, such as Turkey and South Africa. We have also steadily trimmed our overweight position in Brazil in response to increasing political noise. We maintain our structural underweight in low-beta countries, such as the Philippines, China, and the Gulf States, although we have added some long-duration Saudi Arabia to partially hedge our duration underweight.

Currency

Total
Currencies
6
Largest Currency U.S. dollar 99.75% Was (31-May-2020) 100.02%
Other View complete Currency Diversification

Monthly Data as of 30-Jun-2020

Indicative Benchmark : J.P. Morgan Emerging Markets Bond Index Global Diversified

Largest Overweight

Egyptian pound
By 0.23%
Fund 0.23%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -0.25%
Fund 99.75%
Indicative Benchmark 100.00%

Monthly Data as of 30-Jun-2020

31-Oct-2015 - Michael Conelius, Portfolio Manager ,
Given our expectations for continued U.S. dollar strength, we maintained a low and defensive level of non-benchmark currency exposure.

Team (As of 05-Aug-2020)

Michael J.  Conelius

Michael Conelius is a portfolio manager in the Fixed Income Division at T. Rowe Price. Mr. Conelius is lead manager of T. Rowe Price's Emerging Markets Bond Strategy. He is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price International Ltd.

Mr. Conelius has 31 years of investment experience, all of them at T. Rowe Price. Prior to joining the firm in 1988, he was a consultant for Booz Allen Hamilton.

Mr. Conelius earned a B.S. in finance from Towson University and an M.S. in finance from Loyola University Maryland. Mr. Conelius has also earned the Chartered Financial Analyst designation.

  • Fund manager
    since
    2004
  • Years at
    T. Rowe Price
    32
  • Years investment
    experience
    32
Samy Muaddi, CFA

Samy Muaddi is a portfolio manager in the International Fixed Income Division. He is the lead manager of the Emerging Markets Corporate Bond and Asia Credit Bond Strategies and co-manages the Emerging Markets Bond and Global High Income Bond Strategies. Samy also is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price Associates, Inc.

Samy’s investment experience began in 2006 when he joined T. Rowe Price, beginning as an associate analyst in the Fixed Income Division. After that, he was a credit analyst and then an associate portfolio manager on the Emerging Markets team before assuming his current role.

Samy earned a B.A., summa cum laude, in economics from the University of Maryland. He also has earned the Chartered Financial Analyst® designation. Samy is an adjunct professor at Georgetown University in the Walsh Graduate School of Foreign Service.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

  • Fund manager
    since
    2020
  • Years at
    T. Rowe Price
    14
  • Years investment
    experience
    14

Fee Schedule

Share Class Minimum Initial Investment and Holding Amount (USD) Minimum Subsequent Investment (USD) Minimum Redemption Amount (USD) Sales Charge (up to) Investment Management Fee (up to) Ongoing Charges
Class A $1,000 $100 $100 5.00% 125 basis points 1.42%
Class I $2,500,000 $100,000 $0 0.00% 65 basis points 0.73%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.81%
Class Sd $10,000,000 $0 $0 0.00% 0 basis points 0.10%

Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.

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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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