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GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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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Home / Products / SICAV / Emerging Local Markets Bond Fund
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SICAV

Emerging Local Markets Bond Fund

Research-driven investment in emerging market local currency sovereign bonds.

ISIN LU0310189781 WKN A0M1XQ
View more information on risks
Factsheet
KIID
Fund Commentary

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

3.16%
$134.8m
Data as of 31-Dec-2020
Data as of 31-Dec-2020

1YR Return
(View Total Returns)

Manager Tenure

4.52%
8yrs
Data as of 31-Dec-2020
Data as of 15-Jan-2021

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.32
1.67%
Data as of 31-Dec-2020
Data as of 31-Dec-2020

Inception Date 09-Aug-2007

Performance figures calculated in USD

Other Literature

footerPhoto
31-Dec-2020 - Andrew Keirle, Portfolio Manager,
Over the medium term, we are relatively optimistic about the emerging markets (EM) local bonds as vaccine rollouts should facilitate a broader economic recovery, supporting EM exports and tourism. While uncertainty about the pandemic persists and the recent outperformance has somewhat diminished short-term relative value opportunities, ongoing central bank support creates a broadly favourable backdrop for the asset class which is likely to continue in the coming months.
Andrew Keirle
Andrew Keirle, Portfolio Manager

Andrew Keirle is a senior portfolio manager in the Fixed Income Division and a member of the Global Fixed Income Investment Team. Mr. Keirle is the lead portfolio manager for the Emerging Markets Local Currency Bond Strategy and has important input on a number of emerging markets bond strategies and global fixed income strategies. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

 
  • This product's strategy also available as
  • a Strategy

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, with a focus on bonds that are denominated in the local currency.

Investment Approach

  • Focus primarily on sovereign debt denominated in the currencies of the respective emerging countries.
  • Integrate proprietary credit research and relative value analysis.
  • Establish independent credit rating by country.
  • Add value through active country, currency and individual security selection decisions.
  • Limit risk through diversification.
  • Employ long-term investment horizon combined with low portfolio turnover.

Portfolio Construction

  • Higher concentration portfolio structure: typically 100-150 securities
  • Duration bands: managed within +/- 2 years of the benchmark
  • Average Credit Quality: BBB
  • Country exposure maximum 30% per country
  • Target 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 % 4.52% 3.16% 7.25% 1.67% 0.79%
Indicative Benchmark % 2.69% 3.01% 6.72% 1.49% 0.57%
Excess Return % 1.83% 0.15% 0.53% 0.18% 0.22%

Inception Date 09-Aug-2007

Manager Inception Date 31-Oct-2012

Indicative Benchmark: Linked Benchmark

Data as of 31-Dec-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised		 5 YR
Annualised		 10 YR
Annualised
Fund % 4.52% 3.16% 7.25% 1.67%
Indicative Benchmark % 2.69% 3.01% 6.72% 1.49%
Excess Return % 1.83% 0.15% 0.53% 0.18%

Inception Date 09-Aug-2007

Indicative Benchmark: Linked Benchmark

Data as of 31-Dec-2020

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 15-Jan-2021 Quarter to DateData as of 15-Jan-2021 Year to DateData as of 15-Jan-2021 1 MonthData as of 31-Dec-2020 3 MonthsData as of 31-Dec-2020
Fund % -1.06% -1.06% -1.06% 3.73% 11.75%
Indicative Benchmark % -0.93% -0.93% -0.93% 3.48% 9.62%
Excess Return % -0.13% -0.13% -0.13% 0.25% 2.13%

Inception Date 09-Aug-2007

Indicative Benchmark: Linked Benchmark

Indicative Benchmark: Linked Benchmark

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.

Effective 1 January 2011, the benchmark for the sub-fund was changed to J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified. Prior to 1 January 2011, the benchmark was the J.P. Morgan Government Bond Index-Emerging Markets Broad Diversified Index. The benchmark change was made because the firm viewed the new benchmark to be a better representation of the investment strategy of the sub-fund. Historical benchmark representations have not been restated.

footerPhoto
31-Dec-2020 - Andrew Keirle, Portfolio Manager,
EM local currency bonds generated strong returns in December, supported by gains in EM currencies against the U.S. dollar. An additional stimulus package in the U.S. that could lead to elevated issuance, weighed on the greenback. Vaccine deployments in several countries fuelled an uptick in growth expectations. Within the portfolio, both our duration and currency exposure boosted relative performance. Our overweight allocation to Brazilian duration contributed meaningfully, as the government showed willingness to take further economic action against the pandemic. Elsewhere, our off-benchmark holdings in Serbia added, supported by an interest rate cut. Our overweight positions in Peruvian and Malaysian government bonds were also beneficial. Our underweight position in Chile held back performance, however. Within currencies, our long exposures to the Russian rouble, offshore Chinese yuan, and off-benchmark allocation to the Serbian dinar contributed. Meanwhile, our short positions in the Australian dollar and South African rand held back performance amid weakness in the U.S. dollar.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 67.30% Was (30-Nov-2020) 67.96%
Other View Top 10 Issuers

Monthly data as of31-Dec-2020

Holdings

Total
Holdings
106
Largest Holding Brazil Notas do Tesouro Nacional Serie F 3.46% Was (30-Sep-2020) 3.40%
Top 10 Holdings 27.08%
Other View Full Holdings Quarterly data as of  31-Dec-2020

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating Reserves A
By % 6.43% -10.05%
Fund 6.43% 19.68%
Indicative Benchmark 0.00% 29.72%

Average Credit Quality

BBB

Monthly Data as of  31-Dec-2020
Indicative Benchmark:  J.P. Morgan GBI - EM 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.

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration 5-7 Years 1-3 Years
By % 8.38% -18.41%
Fund 29.10% 6.20%
Indicative Benchmark 20.72% 24.61%

Weighted Average Duration

5.60 Years

Monthly Data as of  31-Dec-2020
Indicative Benchmark: J.P. Morgan GBI - EM Global Diversified

footerPhoto
30-Sep-2020 - Andrew Keirle, Portfolio Manager,

At the beginning of the period, the portfolio was tilted more towards EM FX risk exposure rather than duration. As the U.S. dollar briefly depreciated and risk sentiment in the market became more stretched, we trimmed our risk levels in both FX and duration in the middle of the quarter.

Bond Allocation

  • On the duration side, we continue to lean on countries that illustrate recovery in activity combined with supportive central bank policy and subdued inflation. Indonesian government bonds are among our favored positions.
  • In Latin America, we remained overweight Mexico. We view it as an attractive opportunity due to healthy fundamentals and accommodative monetary policy. Conversely, we trimmed our Brazil risk exposure amid political turmoil and increasing fiscal concerns.
  • In emerging Europe, we maintained an overweight to Russia as we believe the country offers healthy account balances and stable policy. We are underweight Poland and Czech Republic as valuations are high, rates are low, and there is limited scope for capital appreciation.
  • We hold off-index long positions in Egypt, Serbia, India, and Kenya due to cheap valuations and favorable demand dynamics.

Currency Selection

  • The strategy remains overweight EM FX positions versus the benchmark funded via a mix of dollar, developed market and EM FX funders. However, we trimmed our long EM FX exposure over the quarter as our short-term conviction on currencies declined to a more neutral position.
  • We retain our overweight position Latin American currencies, primarily via the Mexican peso, Peruvian sol, and Colombian peso.
  • In Asia, we maintain our regional overweight with preference for the Indonesian rupiah, Chinese yuan, and Malaysian ringgit. These positions are partially hedged via shorts in the South Korean won and Taiwanese dollar.
  • We are overweight Emerging Europe currencies, primarily focused on the Czech koruna, Russian ruble, and Romanian leu.

Sectors

Total
Sectors
6
Largest Sector Sovereign 90.79% Was (30-Nov-2020) 91.72%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: J.P. Morgan GBI - EM Global Diversified

Largest Overweight

Reserves
By6.42%
Fund 6.42%
Indicative Benchmark 0.00%

Largest Underweight

Sovereign
By-9.21%
Fund 90.79%
Indicative Benchmark 100.00%

Monthly Data as of 31-Dec-2020

footerPhoto
30-Nov-2015 - Andrew Keirle, Portfolio Manager,
We maintain off-benchmark allocations to selected U.S. dollar-denominated and euro-denominated sovereign and quasi-sovereign bonds that hold attractive relative value.

Regions

Total
Regions
5
Largest Region Asia 32.19% Was (30-Nov-2020) 32.43%
Other View complete Region Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: J.P. Morgan GBI - EM Global Diversified

Largest Overweight

Middle East & Africa
By3.78%
Fund 11.38%
Indicative Benchmark 7.60%

Largest Underweight

Emerging Europe
By-5.06%
Fund 23.20%
Indicative Benchmark 28.26%

Monthly Data as of 31-Dec-2020

Countries

Total
Countries
31
Largest Country Indonesia 9.94% Was (30-Nov-2020) 10.72%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: J.P. Morgan GBI - EM Global Diversified

Largest Overweight

India
By2.34%
Fund 2.34%
Indicative Benchmark 0.00%

Largest Underweight

Poland
By-6.29%
Fund 1.82%
Indicative Benchmark 8.11%

Monthly Data as of 31-Dec-2020

footerPhoto
31-Dec-2020 - Andrew Keirle, Portfolio Manager,
We held positions in countries with supportive central bank policies which appeared favourable from a valuation perspective. We maintained our off-benchmark exposures in India, Egypt and Serbia, while maintaining an overweight to higher-yielding countries including Russia and Indonesia. We retained underweight positions in Thailand and Poland as we prefer to allocate funds to markets offering better valuations. In addition, we reduced our allocation to South Africa as the country is struggling to deal with the effects of the pandemic.

Currency

Total
Currencies
33
Largest Currency 11.06% Was (30-Nov-2020) 11.61%
Other View completeCurrency Diversification

Monthly Data as of  31-Dec-2020

Indicative Benchmark :

Largest Overweight

Egyptian pound
By 2.58%
Fund 2.58%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -11.54%
Fund -11.54%
Indicative Benchmark 0.00%

Monthly Data as of  31-Dec-2020

footerPhoto
31-Dec-2020 - Andrew Keirle, Portfolio Manager,
We maintained our positive stance in EM currencies, focusing on both frontier and mainstream EM. These positions are principally funded by a basket of developed market currencies, primarily the U.S. dollar, and are partially hedged to help insulate any potential downside. We are overweight the Indonesian rupiah and Malaysia ringgit, as we believe they benefit from an improving trade outlook. We still hold off-benchmark positions in the Egyptian pound and Serbian dinar, and we initiated a position in the Ghanaian cedi.

Team (As of 15-Jan-2021)

Andrew Keirle

Andrew Keirle
Portfolio Manager

Andrew Keirle is a senior portfolio manager in the Fixed Income Division and a member of the Global Fixed Income Investment Team. Mr. Keirle is the lead portfolio manager for the Emerging Markets Local Currency Bond Strategy and has important input on a number of emerging markets bond strategies and global fixed income strategies. He is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price International Ltd.

Mr. Keirle has 23 years of investment experience, 14 of which have been with T. Rowe Price. Prior to joining the firm in 2005, he was a portfolio manager and analyst at Lazard Asset Management. Prior to joining Lazard, Mr. Keirle spent seven years as a global portfolio manager at Gulf International Bank in London.

Mr. Keirle is a qualified member of the Institute of Investment Management and Research, and he also holds a diploma from the Society of Technical Analysts. He graduated with a B.Sc. in economics and politics from the University of Swansea at the University of Wales.

  • Fund manager
    since
    2012
  • Years at
    T. Rowe Price
    15
  • Years investment
    experience
    24

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 I $2,500,000 $100,000 $0 0.00% 65 basis points 0.75%
Class Q $1,000 $100 $100 0.00% 65 basis points 0.82%
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.

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. 

Daily performance data is based on the latest available NAV. Performance returns for share classes less than 1 year old (and associated benchmarks) are cumulative rather than annualised.

Please note that no management fees are charged to the S and J share classes. No administration agent fees are charged to the J class. Fee arrangements for the S and J classes are made directly with the investment manager. Please see the prospectus for further information.

The Funds are sub-funds of the T. Rowe Price Funds SICAV, a Luxembourg investment company with variable capital which is registered with Commission de Surveillance du Secteur Financier and which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). Full details of the objectives, investment policies and risks are located in the prospectus which is available with the key investor information documents in English and in an official language of the jurisdictions in which the Funds are registered for public sale, together with the annual and semi-annual reports (together “Fund Documents”). Any decision to invest should be made on the basis of the Fund Documents which are available free of charge from the local representative, local information/paying agent or from authorised distributors and via www.troweprice.com.

Hedged share classes (denoted by 'h') utilise investment techniques to mitigate currency risk between the underlying investment currency(ies) of the fund and the currency of the hedged share class. The costs of doing so will be borne by the share class and there is no guarantee that such hedging will be effective.

Net Asset figure applies to all share classes.

Number of years managing the fund. In the case of co-portfolio management, the longer tenure is displayed.

The specific securities identified and described in this report do not represent all of the securities purchased, sold, or recommended for the sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.

A full list of the currently issued Share Classes including Distributing, Hedged, and Accumulating Categories may be obtained, free of charge and upon request, from the registered office of the Company.