SICAV
Middle East & Africa Equity Fund
Unconstrained, growth-orientated investing in the under explored markets of the Middle East and Africa.
3YR Return Annualised
(View Total Returns)
Total Assets
(USD)
1YR Return
(View Total Returns)
Manager Tenure
Information Ratio
(5 Years)
Tracking Error
(5 Years)
Inception Date 04-Sep-2007
Performance figures calculated in USD
Strategy
Many countries in the Middle East and Africa region are further behind the developed world in terms of the spread of the coronavirus and the lifting of lockdown measures; therefore, much uncertainty remains around the impact of the pandemic. We continue to focus on the long-term fundamentals of our individual companies, their positioning, and the strength of their balance sheets to withstand these difficult times. Over the longer term, this region is likely to be bolstered by a recovery in regional growth and meaningful country-specific improvements, including economic reform. Over recent years, we have been encouraged by policymakers' attempts to cut subsidies to fuel, electricity and gas as part of fiscal consolidation plans.
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In South Africa, we had existing concerns regarding the disappointingly slow path to reform and the economy entered the current crisis already in a recession. The country's macroeconomic outlook is looking increasingly tough this year, not only as a result of the stringent lockdown at the outset of the coronavirus pandemic, but also because South Africa is a small, open economy, which is highly exposed to global growth trends. We focus on our highest-conviction ideas, in well-run, quality companies.
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In West Africa, sentiment in Nigeria has deteriorated due to a lack of reform leadership from President Muhammadu Buhari, which had been hoped for after his win of a second term in office. Economic growth has been struggling to outpace population growth. More recently, this situation has been exacerbated by the volatility of the oil price and increasing concerns that capital controls may be introduced. In Kenya, the removal of the interest rate cap late last year was a positive catalyst for the market. We are able to find opportunities here, particularly given the recent market dislocation.
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Egypt completed an International Monetary Fund-backed reform agenda and loan program in 2019. If the political situation remains stable, this should drive a material improvement to the country's economic backdrop. While challenges still exist, including those to the tourism sector during the current crisis, we are starting to see signs of easing inflation, an improving budget deficit, and currency stability.
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In the Middle East, oil exporting nations have been heavily impacted by the volatility in the oil price. In Kuwait, structural domestic improvement and a government push on infrastructure projects had been key positives coming into 2020. The market's reclassification to emerging markets status by index provider MSCI has been pushed back to November 2020 due to the global spread of the coronavirus. We are selective on bottom-up ideas here. In Saudi Arabia, the IPO of Saudi Aramco, the world's largest integrated oil and gas company, late last year, brought increasing attention to the market. We are also selective here, looking for opportunities to add to our highest conviction names.
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Overall, we believe the long-term outlook for the Africa and Middle East region remains robust, despite the current global slowdown. Looking beyond the current crisis, growth in this region is likely to be driven by some of the world's most attractive demographics, rising urbanization and levels of infrastructure investment, and a strong asset base in natural resources. There is much scope for economic improvement, driven by reform implementation and growing structural domestic demand. This will translate into strong corporate earnings growth that we believe can be sustained by various businesses in the years ahead. We believe that the fundamentals generally remain intact and that strong growth will resume on the other side of the crisis.
Investment Objective
To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a diversified portfolio of stocks of companies in the developing countries of the Middle East and Africa.Investment Approach
- The fund is growth oriented, unconstrained and designed to deliver strong absolute performance.
- Stock selection is driven by fundamental analysis seeking to identify the best companies with attractive valuations and earnings that are growing faster than their local, regional or global peers.
- In investment frontiers such as the Middle East and Africa market, inefficiencies are likely to be significant. One of the core tenets of our investment strategy is that stocks are frequently mispriced.
- Focus on finding companies with above-average revenue growth, strong management and good corporate governance.
- The bottom-up, stock specific approach is supported by a top-down perspective focusing on macro and micro-factors mainly at the country level.
- Manager with a proven track record of investing in emerging markets supported by a dedicated analyst team.
- Dedicated Portfolio Manager supported by a well-resourced analyst team.
Portfolio Construction
- Typically 50-80 stocks
- Individual positions typically range from 2.0%-8.0%
- Country and sector weights unconstrained
- Cash reserves typically 0%-5%
Performance (Class I)
Annualised Performance
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
Since Manager Inception Annualised |
|
|---|---|---|---|---|---|
| Fund % | -23.90% | -4.88% | -4.35% | 2.57% | 3.78% |
| Indicative Benchmark % | -19.25% | -2.95% | -3.34% | 2.47% | 1.65% |
| Excess Return % | -4.65% | -1.93% | -1.01% | 0.10% | 2.13% |
| 1 YR | 3 YR Annualised |
5 YR Annualised |
10 YR Annualised |
|
|---|---|---|---|---|
| Fund % | -23.90% | -4.88% | -4.35% | 2.57% |
| Indicative Benchmark % | -19.25% | -2.95% | -3.34% | 2.47% |
| Excess Return % | -4.65% | -1.93% | -1.01% | 0.10% |
Recent Performance
| Month to DateData as of 05-Aug-2020 | Quarter to DateData as of 05-Aug-2020 | Year to DateData as of 05-Aug-2020 | 1 MonthData as of 30-Jun-2020 | 3 MonthsData as of 30-Jun-2020 | |
|---|---|---|---|---|---|
| Fund % | -0.30% | 1.52% | -21.23% | 2.17% | 12.29% |
| Indicative Benchmark % | 0.43% | 3.81% | -16.56% | 5.16% | 17.36% |
| Excess Return % | -0.73% | -2.29% | -4.67% | -2.99% | -5.07% |
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.
Index returns shown with reinvestment of dividends after the deduction of withholding taxes.
Effective 1 July 2018, the "net" version of the indicative benchmark replaced the "gross" version of the indicative benchmark. The "net" version of the indicative benchmark assumes the reinvestment of dividends after the deduction of withholding taxes applicable to the country where the dividend is paid; as such, the returns of the new benchmark are more representative of the returns experienced by investors in foreign issuers. Historical benchmark performance has been restated accordingly.
Holdings
Total
Holdings
42
Largest Top Contributor^
Naspers
By 3.03%Largest Top Detractor^
Shoprite Holdings
By -0.51%Top Purchase
Saudi Basic Industries (N)
3.30%Top Sale
Prosus
1.99%
Sectors
Total
Sectors
10
Top Contributor^
Consumer Discretionary
Net Contribution 0.40%Top Detractor^
Materials
Net Contribution -3.16%Largest Overweight
Consumer Staples
Largest Underweight
Materials
Countries
Total
Countries
13
Top Contributor^
Netherlands
Net Contribution 0.39%Top Detractor^
South Africa
Net Contribution -3.84%Largest Overweight
Morocco
Largest Underweight
Saudi Arabia
Team (As of 05-Aug-2020)
Oliver Bell is a vice president of T. Rowe Price Group, Inc., associate head of Equity EMEA and the lead portfolio manager and chairman of the Investment Advisory Committee for the T. Rowe Price Middle East & Africa Equity Strategy and the Frontier Markets Equity Strategy. He is a member of the International Equity Steering Committee and a Board member of T. Rowe Price (Luxembourg) Management S.a.r.l.
Mr. Bell has 21 years of investment experience, seven of which have been with T. Rowe Price. Prior to joining the firm in 2011, Mr. Bell was head of emerging markets equities research at Pictet Asset Management (the institutional asset management arm of Pictet & Cie, the largest private bank in Switzerland), where his responsibilities included managing several funds, as well as a team of analysts. During his time at Pictet, Mr. Bell was directly responsible for managing investments in the emerging Europe, Middle East and Africa region as part of the global emerging markets and the standalone Middle East and Africa portfolios. Mr. Bell also managed the Global Emerging Markets High Dividend Yield Equity Strategy.
Mr. Bell has earned a bachelor of science degree in chemistry from Exeter University and also has earned the Investment Management Certificate.
- Fund manager2011
since - Years at8
T. Rowe Price - Years investment22
experience
Seun Oyegunle is the co-portfolio manager of the Africa & Middle East Fund in the Equity Division.
Seun’s investment experience began in 2009, and he has been with T. Rowe Price since 2013, beginning as a research analyst, covering retail and other sectors across a number of emerging markets, in the Emerging Markets department of the Equity Division. Prior to this, Seun was employed by Asset and Research Management Ltd as an analyst covering the consumer goods sector. He also was employed by Vetiva Capital Management Ltd.
Seun earned an M.B.A. in finance from the University of Pennsylvania, The Wharton School, and a B.Sc. in chemical engineering from the University of Lagos. Seun also has earned the Chartered Financial Analyst® designation.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
- Fund manager2020
since - Years at6
T. Rowe Price - Years investment10
experience
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% | 190 basis points | 2.07% |
| Class I | $2,500,000 | $100,000 | $0 | 0.00% | 100 basis points | 1.10% |
| N/A |
Please note that the Ongoing Charges figure is inclusive of the Investment Management Fee and is charged per annum.
Oliver Bell is a vice president of T. Rowe Price Group, Inc., associate head of Equity EMEA and the lead portfolio manager and chairman of the Investment Advisory Committee for the T. Rowe Price Middle East & Africa Equity Strategy and the Frontier Markets Equity Strategy. He is a member of the International Equity Steering Committee and a Board member of T. Rowe Price (Luxembourg) Management S.a.r.l.