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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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SICAV

Emerging Local Markets Bond Fund

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

ISIN LU0310189781 Bloomberg TRPELMI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

6.09%
$159.0m

1YR Return
(View Total Returns)

Manager Tenure

4.86%
8yrs

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.15
1.66%

Inception Date 09-Aug-2007

Performance figures calculated in USD

31-Aug-2021 - Andrew Keirle, Portfolio Manager,
We remain constructive on emerging market (EM) local bonds given attractive valuations and the prospect of improving EM growth. Many EM central banks have begun tightening monetary policy, which could act as a buffer when developed peers follow suite. While lagging vaccine rollouts, fiscal imbalances and the Delta variant are near-term headwinds, these are starting to fade, reinforcing our view of the growth rotation and the broad improvement in EM growth in the medium term.
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.

 

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.
  • 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

  • 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 % 4.86% 6.09% 3.44% 0.51% 0.29%
Indicative Benchmark % 4.14% 5.78% 3.18% 0.36% 0.17%
Excess Return % 0.72% 0.31% 0.26% 0.15% 0.12%

Inception Date 09-Aug-2007

Manager Inception Date 31-Oct-2012

Indicative Benchmark: Linked Benchmark

Data as of 31-Aug-2021

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % 8.46% 4.47% 3.83% 0.67%
Indicative Benchmark % 6.57% 4.12% 3.25% 0.47%
Excess Return % 1.89% 0.35% 0.58% 0.20%

Inception Date 09-Aug-2007

Indicative Benchmark: Linked Benchmark

Data as of 30-Jun-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 24-Sep-2021 Quarter to DateData as of 24-Sep-2021 Year to DateData as of 24-Sep-2021 1 MonthData as of 31-Aug-2021 3 MonthsData as of 31-Aug-2021
Fund % -2.14% -2.28% -5.79% 0.28% -1.43%
Indicative Benchmark % -2.48% -2.14% -5.45% 0.77% -0.88%
Excess Return % 0.34% -0.14% -0.34% -0.49% -0.55%

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.

31-Aug-2021 - Andrew Keirle, Portfolio Manager,
EM local currency bonds generated a positive return in August, driven mostly by gains in select EM currencies against the U.S. dollar. Losses from bonds moderated this slightly, however. Within the portfolio, our bond allocation drove relative outperformance while our currency selection also added. Our defensive short positions in U.S. Treasuries and German Bunds contributed as core rates rallied on rising central bank tapering expectations. Elsewhere, in Central and Eastern Europe (CEE), interest rate hikes in Hungary and the Czech Republic supported our underweight bias to the region. Meanwhile, our overweight to Malaysian duration also helped. In contrast, a 100 basis point rate hike in Brazil hindered our overweight to Brazilian duration. Within currencies, our off-benchmark allocations contributed, particularly in the Indian rupee which benefitted from increased risk appetites in late August. In contrast, our overweight exposure to the Chilean peso hindered amid election jitters and fears of a strike at the country’s largest copper mine

Holdings

Issuers

Top
Issuers
10
Top 10 Issuers 71.98% Was (31-Jul-2021) 74.07%
Other View Top 10 Issuers

Monthly data as of31-Aug-2021

Holdings

Total
Holdings
102
Largest Holding Brazil Notas do Tesouro Nacional Serie F 5.22% Was (31-Mar-2021) 3.57%
Top 10 Holdings 29.45%
Other View Full Holdings Quarterly data as of  30-Jun-2021

Quality Rating View quality analysis

  Largest Overweight Largest Underweight
Quality Rating B A
By % 5.67% -7.26%
Fund 6.72% 22.33%
Indicative Benchmark 1.05% 29.60%

Average Credit Quality

BBB

Monthly Data as of  31-Aug-2021
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 % 10.86% -15.97%
Fund 30.21% 10.09%
Indicative Benchmark 19.34% 26.06%

Weighted Average Duration

4.98 Years

Monthly Data as of  31-Aug-2021
Indicative Benchmark: J.P. Morgan GBI - EM Global Diversified

31-Mar-2021 - Andrew Keirle, Portfolio Manager,

During the period, we reduced the portfolio's duration to a relative underweight position. This was driven in part by adding to defensive short positions in light of the market turbulence. We continued to hold a constructive view on EM FX, with a bias for countries that we believe have higher growth prospects. These positions were principally funded by a basket of developed market currencies, most notably the U.S. dollar and the euro.

Bond Allocation

  • Given the interest rate and yield volatility in the period, we added to our defensive positions partly via credit default swaps.
  • We added to underweight positions in Central and Eastern Europe and Thailand on the basis of higher correlations with global core rates and potentially limited scope for future capital appreciation.
  • Amid expectations for headline inflation to increase, we added to our inflation-linked debt by opening a new position in South Africa. This complemented existing inflation-linked positions in Colombia, Mexico, Brazil, and Thailand.�
  • We also moved further underweight Turkish duration due to concerns over central bank policy while reducing our modest overweight in Brazil and Russia.
  • We retained our off-benchmark positions in Egypt and Ghana, while our exposure to Serbia was trimmed after a period of strong performance.

Currency Selection

  • We remained overweight EM FX, although exposure was modestly reduced through the period. These positions continued to be principally funded by a basket of developed market currencies, primarily the U.S. dollar, although we trimmed this short exposure during the period given the country's improving economic outlook and relatively successful vaccine rollout.
  • We retained our overweight position in Latin American currencies, primarily via the Mexican peso and Peruvian sol.
  • In Asia, we maintained our regional overweight, with a preference for the Chinese yuan, Indonesian rupiah, and Malaysian ringgit.
  • We also retained an overall overweight in the Czech koruna and Romanian leu.
  • We continued to hedge some of our EM currency risk through short positions in select currencies, including the Taiwanese dollar and Canadian dollar.
  • We closed our off-benchmark position in the Ukrainian hryvnia and initiated a new position in the Korean won.

Sectors

Total
Sectors
6
Largest Sector Sovereign 93.51% Was (31-Jul-2021) 95.02%
Other View complete Sector Diversification

Monthly Data as of 31-Aug-2021

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

Largest Overweight

Reserves
By3.50%
Fund 3.50%
Indicative Benchmark 0.00%

Largest Underweight

Sovereign
By-6.49%
Fund 93.51%
Indicative Benchmark 100.00%

Monthly Data as of 31-Aug-2021

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 35.35% Was (31-Jul-2021) 36.50%
Other View complete Region Diversification

Monthly Data as of 31-Aug-2021

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

Largest Overweight

Middle East & Africa
By6.83%
Fund 14.83%
Indicative Benchmark 8.01%

Largest Underweight

Emerging Europe
By-8.24%
Fund 21.02%
Indicative Benchmark 29.26%

Monthly Data as of 31-Aug-2021

Countries

Total
Countries
37
Largest Country Indonesia 10.39% Was (31-Jul-2021) 10.72%
Other View complete Country Diversification

Monthly Data as of 31-Aug-2021

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

Largest Overweight

Egypt
By3.35%
Fund 3.35%
Indicative Benchmark 0.00%

Largest Underweight

Poland
By-6.84%
Fund 1.62%
Indicative Benchmark 8.47%

Monthly Data as of 31-Aug-2021

31-Aug-2021 - Andrew Keirle, Portfolio Manager,
Our relative duration remained broadly flat in August. We remain wary of a steepening yield curve environment, so retained defensive short positions in core markets – primarily U.S. Treasuries and German Bunds. We also retained our underweight exposure to CEE given its improving growth outlook. Elsewhere, we reduced our overweight position in Asia, particularly in Indonesia where we see less potential for the bonds to rally further. In Latin America, we remained overweight at the margin as we continue to find pockets of attractive relative value.

Currency

Total
Currencies
34
Largest Currency 10.60% Was (31-Jul-2021) 10.38%
Other View completeCurrency Diversification

Monthly Data as of  31-Aug-2021

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

Largest Overweight

Egyptian pound
By 2.51%
Fund 2.51%
Indicative Benchmark 0.00%

Largest Underweight

U.S. dollar
By -10.17%
Fund -10.17%
Indicative Benchmark 0.00%

Monthly Data as of  31-Aug-2021

31-Aug-2021 - Andrew Keirle, Portfolio Manager,
We continue to hold a positive bias toward EM currencies, while using a basket of developed market currencies, most notably the U.S. dollar and euro as funding for more attractive opportunities. We ended August overweight currencies in emerging Europe, including the Russian rouble, where we see attractive relative value, and those that should benefit from higher growth prospects, including the Hungarian forint. We also opened an off-benchmark positions in the Kazakhstani tenge and Zambian kwacha given strong fundamentals and attractive valuations respectively.

Team (As of 10-Sep-2021)

Andrew Keirle

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
    16
  • Years investment
    experience
    25

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.