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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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T. Rowe Price

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SICAV

Emerging Markets Bond Fund

Active investment in mainly sovereign emerging-market bonds.

ISIN LU1328257263 WKN A2ABBF

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

4.87%
$275.8m

1YR Return
(View Total Returns)

Manager Tenure

11.14%
1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.17
3.41%

Inception Date 16-Dec-2015

Performance figures calculated in USD

30-Jun-2021 - Samy Muaddi, Portfolio Manager ,
Despite the somewhat challenging fundamental backdrop, absolute risk premia in emerging markets (EM) debt are below historic averages. However, the relative value of EM debt versus other asset classes is still compelling. EM debt’s yield premium remains intact and the long-term coupon compounding opportunity combined with a benign default outlook will likely continue to attract investors. This balances our view, though we have been reducing active risk in the strategy.
Samy Muaddi, CFA
Samy Muaddi, CFA, Portfolio Manager

Samy Muaddi is a portfolio manager in the International Fixed Income Division. He is the portfolio manager of the Emerging Markets Bond Strategy and co-manages the Emerging Markets Corporate Bond and Global High Income Bond Strategies. He previously managed the firm’s Asia Credit Bond Strategy from its inception until 2020. Samy also 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.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

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 Q)

Annualised Performance

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 11.14% 4.87% 4.29% 5.95%
Indicative Benchmark % 7.53% 6.71% 4.86% 6.32%
Excess Return % 3.61% -1.84% -0.57% -0.37%

Inception Date 16-Dec-2015

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

Data as of 30-Jun-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
Since Inception
Annualised
Fund % 11.14% 4.87% 4.29% 5.95%
Indicative Benchmark % 7.53% 6.71% 4.86% 6.32%
Excess Return % 3.61% -1.84% -0.57% -0.37%

Inception Date 16-Dec-2015

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

Data as of 30-Jun-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 26-Jul-2021 Quarter to DateData as of 26-Jul-2021 Year to DateData as of 26-Jul-2021 1 MonthData as of 30-Jun-2021 3 MonthsData as of 30-Jun-2021
Fund % 0.51% 0.51% 0.73% 0.36% 4.48%
Indicative Benchmark % 0.41% 0.41% -0.26% 0.73% 4.06%
Excess Return % 0.10% 0.10% 0.99% -0.37% 0.42%

Inception Date 16-Dec-2015

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-2021 - Samy Muaddi, Portfolio Manager ,
EM debt generated positive total returns in June, advancing amid continued economic recoveries and stable risk sentiment. EM credit spreads drifted slightly wider but were more than offset by declining longer-maturity U.S. Treasury rates. Within the portfolio, our off-benchmark holdings in Venezuela held back relative returns. The sanctioned bonds largely do not trade, yet mark-to-market pricing is ongoing. Our overweight allocation to Sri Lanka also held back relative performance as the distressed issuer gave back some recent gains amid renewed repayments concerns. Our overweight allocation to El Salvador was a slight drag on relative returns as the IMF expressed concerns about the country's decision to make bitcoin legal tender. Conversely, an off-benchmark position in Laos generated gains as the distressed issuer paid its maturing bond. Security selection within Mexico supported also relative results, led by advances in longer-maturity quasi-sovereigns Mexico City Airport Trust and Petroleos Mexicanos.

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 29.73% Was (31-May-2021) 29.22%
Other View Top 10 Issuers

Monthly data as of30-Jun-2021

Holdings

Total
Holdings
223
Largest Holding Bahamas Government International Bond 2.32% Was (31-Mar-2021) 2.70%
Top 10 Holdings 19.19%
Other View Full Holdings Quarterly data as of  30-Jun-2021

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating BB A
By % 11.95% -11.70%
Fund 30.69% 4.82%
Indicative Benchmark 18.74% 16.52%

Average Credit Quality

BB

Monthly Data as of  30-Jun-2021
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 5-7 Years 3-5 Years
By % 3.89% -4.24%
Fund 17.74% 10.20%
Indicative Benchmark 13.85% 14.44%

Weighted Average Maturity

12.58 Years

Monthly Data as of  30-Jun-2021
Indicative Benchmark:  J.P. Morgan Emerging Markets Bond Index Global Diversified

Duration View duration analysis

  Largest Overweight Largest Underweight
Duration 5-7 Years 1-3 Years
By % 4.94% -8.14%
Fund 22.31% 5.95%
Indicative Benchmark 17.37% 14.09%

Weighted Average Duration

8.12 Years

Monthly Data as of  30-Jun-2021
Indicative Benchmark: J.P. Morgan Emerging Markets Bond Index Global Diversified

31-Mar-2021 - Michael Conelius, Portfolio Manager ,

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

Mexico

We added to Mexico, making it the largest overweight. The economy is poised to benefit from strong U.S. growth, and we continue to find attractive relative value in the liquid investment grade country, particularly in quasi-sovereign issuer Petroleos Mexicanos, though we trimmed holdings in Mexico City Airport Trust, locking in gains. We also added to corporate issuers Banco Mercantil de Norte and Axtel.

Higher-Conviction Frontiers

The Bahamas and Ghana are meaningful overweights in the portfolio. Following recent strong performance, we trimmed our holdings in Ghana. maintained our allocation to the Bahamas as the higher-conviction frontier provides relatively high yields and improving fundamentals, creating attractive relative value opportunities. The Bahamas is also poised to benefit from increased tourism.

India

India grew to a significant overweight. Our holdings remain focused on quasi-sovereign Export-Import Bank, due to their higher yields in a more defensive market. We also hold corporate issuers Periama, Bharti Airtel, and Adani Ports.

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

Malaysia

Malaysia's high credit ratings and low yields provide limited opportunities. Coronavirus-induced lockdowns hinder near-term upside potential.

Kazakhstan

We remain underweight Kazakhstan amid political changes. While this could be an indication that the country is moving to a more open economy, spreads are tight with limited upside and valuations versus similar oil-exporting peers are uninspiring.

Peru and Panama

We are significantly underweight Peru and Panama as the higher-quality sovereigns are relatively low yielding, and we see better relative value elsewhere. Peru's political uncertainty heading into presidential elections further diminished its appeal.

Sectors

Total
Sectors
4
Largest Sector Sovereign 62.63% Was (31-May-2021) 62.78%
Other View complete Sector Diversification

Monthly Data as of 30-Jun-2021

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

Largest Overweight

Corporate
By19.24%
Fund 19.59%
Indicative Benchmark 0.36%

Largest Underweight

Sovereign
By-19.60%
Fund 62.63%
Indicative Benchmark 82.23%

Monthly Data as of 30-Jun-2021

30-Jun-2021 - Samy Muaddi, Portfolio Manager ,
We continue to find value in fundamentally attractive quasi-sovereigns and corporates in mainstream markets such as Mexico that offer yield premiums over the sovereign.

Countries

Total
Countries
60
Largest Country Mexico 10.38% Was (31-May-2021) 10.01%
Other View complete Country Diversification

Monthly Data as of 30-Jun-2021

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

Largest Overweight

Mexico
By5.54%
Fund 10.38%
Indicative Benchmark 4.85%

Largest Underweight

Malaysia
By-2.66%
Fund 0.00%
Indicative Benchmark 2.66%

Monthly Data as of 30-Jun-2021

30-Jun-2021 - Samy Muaddi, Portfolio Manager ,
We are buying into improved valuations in institutionally-sound mainstream markets, such as Colombia and Chile. But we are underweight both Turkey and Brazil due to deteriorating credit profiles and institutional quality. In the frontier space, we remain overweight in a variety of countries with improving macroeconomic and reform outlooks, such as Oman, Egypt, and Ukraine. But we are reducing our larger active weights and trimming more vulnerable issuers in this space. We maintain our structural underweight exposure to low-beta, investment-grade countries.

Currency

Total
Currencies
8
Largest Currency 98.92% Was (31-May-2021) 98.96%
Other View completeCurrency Diversification

Monthly Data as of  30-Jun-2021

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

Largest Overweight

Chinese renminbi
By 0.78%
Fund 0.78%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -1.08%
Fund 98.92%
Indicative Benchmark 100.00%

Monthly Data as of  30-Jun-2021

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 27-Jul-2021)

Samy Muaddi, CFA

Samy Muaddi is a portfolio manager in the International Fixed Income Division. He is the portfolio manager of the Emerging Markets Bond Strategy and co-manages the Emerging Markets Corporate Bond and Global High Income Bond Strategies. He previously managed the firm’s Asia Credit Bond Strategy from its inception until 2020. Samy also is a vice president of T. Rowe Price Group, Inc., T. Rowe Price Associates, Inc., and T. Rowe Price International Ltd.

Samy has been with T. Rowe Price since 2006, 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
    15
  • Years investment
    experience
    15

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.