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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.

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Emerging Markets Equity Fund

Seeking to capture compelling growth opportunities in dynamic emerging markets.

ISIN LU0860350148 Bloomberg TRPGEMQ:LX

3YR Return Annualised
(View Total Returns)

Total Assets


1YR Return
(View Total Returns)

Manager Tenure


Information Ratio
(5 Years)

Tracking Error
(5 Years)


Inception Date 14-Jan-2013

Performance figures calculated in USD

31-Jan-2020 - Gonzalo Pángaro, Portfolio Manager ,
While emerging markets (EM) had a strong finish to 2019 on positive U.S.-China trade developments, they have been volatile recently, sparked by the outbreak of the coronavirus. Uncertainties remain about the potential economic impact although, on the positive side, we believe lower U.S. interest rates may be supportive for EM, while most of these countries are in better financial shape than in the past. Overall, we think company valuations look attractive on a medium-to long-term view.
Gonzalo Pángaro
Gonzalo Pángaro, Co-Portfolio Manager

Gonzalo Pángaro is the lead portfolio manager for the Emerging Markets Equity Strategy in the Equity Division. He is chairman of the Investment Advisory Committee for the Emerging Markets Equity Strategy  and a member of the International Equity Steering Committee. Gonzalo is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.



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 emerging market companies.

Investment Approach

  • Employ fundamental analysis to identify companies with sustainable above-market earnings growth rates.
  • Focus on franchise strength, management team quality, free cash flow, and financing/balance sheet structure.
  • Verify relative valuation appeal versus both local market and broad sector opportunity set.
  • Apply negative screening for macroeconomic and political factors to temper bottom-up enthusiasm for specific securities.
  • 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

  • Typically 80-100 stocks
  • Expected 3-7% tracking error
  • Individual positions typically range from 0.30% to 6.00% — average position size from 0.50% to 1.00%
  • Country ranges +/- 10% absolute deviation from the benchmark
  • Sector ranges +/- 15% absolute deviation from the benchmark
  • Reserves are typically less than 5%
  • Expected Turnover range: 20-40%

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Fund % 10.62% 12.16% 9.49% 5.36%
Indicative Benchmark % 16.96% 12.30% 9.39% 4.25%
Excess Return % -6.34% -0.14% 0.10% 1.11%

Inception Date 14-Jan-2013

Indicative Benchmark: MSCI Emerging Markets Index Net

Data as of 31-Oct-2021

Performance figures calculated in USD

  1 YR 3 YR
5 YR
Since Inception
Fund % 11.24% 8.95% 9.19% 5.35%
Indicative Benchmark % 18.20% 8.58% 9.23% 4.17%
Excess Return % -6.96% 0.37% -0.04% 1.18%

Inception Date 14-Jan-2013

Indicative Benchmark: MSCI Emerging Markets Index Net

Data as of 30-Sep-2021

Performance figures calculated in USD

Recent Performance

  Month to DateData as of 30-Nov-2021 Quarter to DateData as of 30-Nov-2021 Year to DateData as of 30-Nov-2021 1 MonthData as of 31-Oct-2021 3 MonthsData as of 31-Oct-2021
Fund % -5.43% -4.89% -11.26% 0.57% -1.55%
Indicative Benchmark % -4.08% -3.13% -4.34% 0.99% -0.49%
Excess Return % -1.35% -1.76% -6.92% -0.42% -1.06%

Inception Date 14-Jan-2013

Indicative Benchmark: MSCI Emerging Markets Index Net

Indicative Benchmark: MSCI Emerging Markets Index Net

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.

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. 

31-Oct-2021 - Gonzalo Pángaro, Portfolio Manager ,
The MSCI Emerging Markets Index rose in U.S. dollar terms in October but underperformed the MSCI World Index. At the portfolio level, stock selection in the financials sector held back relative returns. A Brazilian investment platform we hold underperformed; the company released quarterly operating data that we viewed as mixed. Figures for assets under custody came in lower than both our and consensus expectations, reflecting the impact of weaker markets. Overall, we think the name is a share gainer in a large and growing market; we see the company as having advantages in terms of distribution and pricing. On the positive side, our choice of securities in the industrials and business services sector was beneficial. We have a position in a Chinese relay producer that saw its share price strongly outperform. We view the company as a quality long-term growth story; we expect it to be a market-share gainer in a growing industry, and we also believe it has scope to expand margins.


Largest Holding Taiwan Semiconductor Manufacturing 9.63% Was (30-Jun-2021) 9.72%
Other View Full Holdings Quarterly data as of  30-Sep-2021
Top 10 Holdings 41.58% View Top 10 Holdings Monthly data as of  31-Oct-2021

Largest Top Contributor^

China Mengniu Dairy
% of fund 2.71%

Largest Top Detractor^

Tencent Holdings
% of fund 6.56%

^Absolute, percentages based on the difference between the total net assets of the two largest holdings of the fund.

Quarterly Data as of 30-Sep-2021

Top Purchase

Was (30-Jun-2021) 0.84%

Top Sale

Taiwan Semiconductor Manufacturing
Was (30-Jun-2021) 9.72%

Quarterly Data as of 30-Sep-2021

31-Dec-2018 - Gonzalo Pángaro, Portfolio Manager ,

We believe (as we have for some time) that, by and large, emerging market countries are in relatively good economic shape. When compared with developed markets, and particularly the U.S., they are at an earlier stage in terms of economic recovery and also in terms of improvements in earnings and margins. However, emerging markets have seen volatile conditions in the recent sell-off in global equities; while we remain mindful of the risks to the asset class, such as continued trade tensions between the U.S. and China and the future path of U.S. monetary policy, our view is that valuations are at attractive levels, while currencies have also corrected. Indeed, we have been taking advantage of this volatility to add to our positions in companies where we have a high level of conviction over their long-term prospects.

Overall, the portfolio continues to have a growth tilt. We are overweight to the IT sector, consumer-related stocks, and financials, where our highly detailed investment research is helping us to identify companies that we believe offer good growth potential. We are underweight to areas of the market where we struggle to find companies with sufficient scope for growth, such as energy, materials, and telecom names.

We Retain Our Overweight To IT; Sector Remains One Of The Largest In Emerging Markets

The size of the IT sector in emerging markets has fallen since the recent MSCI sector reclassification, with several companies (including some names that we continue to own in the portfolio, such as Chinese internet companies Alibaba and Tencent) being moved to either the consumer discretionary space or the new communication services sector. However, IT remains one of the largest sectors within emerging markets, and we retain our overweight.

During the quarter, we initiated a position in Brazilian company Stone, which engages in the provision of financial technology solutions. The company processes payments, which we believe gives it a great deal of scope to grow and expand into other segments and businesses. We met the company following an investment research trip to Brazil in November, and we believe it offers compelling investment potential.

Private Sector Banks In India Are Continuing To Gain Market Share

The portfolio is overweight to financials, the largest sector in emerging markets, where we have identified good investment potential among selected banking and insurance stocks across a range of countries. For example, in India, we think there are some significant tailwinds for private sector banks. Broadly speaking, in our view, the state-owned banks in India are continuing to suffer from some poor loans and poor asset quality, and this is curbing the amount of capital they have to grow their loan books. The private banks are stepping into that gap; by and large they are taking market share in terms of credit growth, and return on equity is improving. These companies are also investing in their online banking and product offerings, and we think that this is helping them to build a stronger competitive position. While we are mindful of recent issues in the wholesale funding market in India, we believe that the risks have reduced. Overall, our view is that the banks that we own here have high-quality balance sheets and diversified sources of funding, with less dependence on wholesale funding. Another issue we are cognizant of is the recent change in leadership of the Reserve Bank of India following the unexpected resignation of the previous central bank head, who had disagreements with Prime Minister Narendra Modi over monetary policy. While we do not view this as a significant near-term risk, we will be monitoring the situation closely.

Over the quarter, we initiated or added to some positions in the financials sector and trimmed our holdings in a number of other names.

    • We initiated a position in Brazilian stock exchange company B3, following an investment research trip to Brazil in November and a meeting with the company's CFO. We would expect the stock to benefit from an environment of improving growth and market performance. With interest rates coming down and risk appetite increasing, we believe there are a number of tailwinds for the equity market environment and, therefore, the company's earnings. B3 also trades at a discount to other global exchanges.
    • We added to our position in Al Rajhi, Saudi Arabia's second-largest bank. The Saudi banking sector is favorably positioned, in our view; it is an oligopolistic market with high barriers to entry. We expect the banks to benefit from interest rate hikes from the U.S. Federal Reserve (given the Saudi currency's peg to the U.S. dollar). In our view, economic expansion and loan growth are also set to recover. We believe that Al Rajhi is the highest-quality Saudi bank, and we expect it to grow margins and return on equity.
    • We added to our position in South African insurer Sanlam, which offers both life and non-life cover as well as other financial services. We prefer the name to fellow South African financial services group FirstRand (which we also hold; see below for further details) and switched some of our holding in this company into Sanlam. We also believe that Sanlam is good operationally, and the company continues to take market share.
    • We trimmed our position in South African group FirstRand, which, in our view, is the highest-quality bank in emerging markets, with superior return on equity. We believe the medium- to long-term prospects for the company remain on track, although on a near-term view the valuation is looking a little stretched after strong outperformance. We have, therefore, taken some profits and switched into insurer Sanlam (see above for further details).
    • We trimmed our position in Brazilian name Itau Unibanco on strong outperformance. The bank remains a core position for the portfolio, given the supportive domestic environment, as loan growth picks up and consumer confidence rebounds. The banking industry structure in Brazil is also attractive, in our view, with a high level of consolidation and a well-capitalized system.
    • We reduced our position in Ping An, China's largest insurer. The company's advanced technology platform is a competitive advantage, in our view, and also provides other financial technology options and opportunities. We continue to like the name for what we see as its favorable long-term fundamentals, but given the increased equity market volatility at present, associated with "trade war" rhetoric escalation, we have trimmed the position as the company has high equity market exposure.

Growing Prosperity Across Developing World Is Providing A Strong Tailwind For Consumer Stocks, In Our View

Increased prosperity across the emerging world remains a powerful medium- to long-term trend, in our view. We have identified several companies that we believe are well placed to take advantage of the considerable business opportunities that this growing wealth presents; as a result, the portfolio has a large overweight to consumer-related stocks.

Over the period, we trimmed our holding in Brazilian name Lojas Renner, one of our largest relative positions, following a strong period of outperformance in the wake of Jair Bolsonaro's election victory. We believe the apparel retailer has strong operational efficiency, and, in our view, this may enable it to continue to take market share. The improving consumer environment may provide a further boost. Given Lojas Renner's significant recent outperformance, taking some profits seemed prudent, in our view.

Portfolio Remains Underweight To Commodity-Driven Sectors

We retain our long-standing underweight to the commodity-driven energy and materials sectors. Broadly speaking, we struggle to identify stocks in these areas of the market with sufficient growth potential, while we continue to have a negative view on the longer-term outlook for the price of oil. Having said that, we have stock-specific positions in markets including Russia and the United Arab Emirates, partially as a counterbalance to our large underweight to energy; both markets are correlated to oil-price trends.

We have also identified some stock-specific opportunities in the materials space and made some changes to our holdings here over the quarter; we initiated a position in a pulp producer and trimmed our holding in a mining stock.

    • We initiated a position in Brazilian company Suzano, which became the world's largest pulp producer following a merger. Suzano is a relatively low-cost producer, and with strong pulp demand and robust free cash flow generation, we believe the near-term outlook for the company is supportive.
    • We reduced our holding in Fresnillo, a Mexican gold mining company listed in London. We trimmed the name because we believe production has peaked and also on concerns about a deteriorating political environment with the election victory last year of left wing populist candidate Andres Manuel Lopez Obrador. In our view, the risk outlook and risk premium for the stock has increased on the back of this development.

We Are Underweight To Communication Services, Largely A Result Of Low Exposure To Telecom Names

One of the key changes in the recent MSCI sector reclassification was that the telecommunication services sector was expanded and renamed communication services. As part of the changes, some securities previously assigned to information technology or consumer discretionary were reclassified as communication services. We are underweight to the new sector, largely a result of our low exposure to telecommunications stocks; this area of the market is relatively mature and "ex growth" even within the emerging world.

However, we have a sizable position in communication services in absolute terms, largely a result of names that have moved across from other sectors during the reclassification and which we continue to hold in the portfolio, the foremost of which is Chinese internet stock Tencent, in which we continue to have a high level of conviction.


Largest Sector Financials 23.45% Was (30-Sep-2021) 23.03%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Emerging Markets Index

Top Contributor^

Information Technology
Net Contribution 0.28%
Selection 0.20%

Top Detractor^

Net Contribution -0.87%


Quarterly Data as of 30-Sep-2021

Largest Overweight

Consumer Staples
Fund 14.57%
Indicative Benchmark 5.82%

Largest Underweight

Fund 0.00%
Indicative Benchmark 8.53%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Gonzalo Pángaro, Portfolio Manager ,
Broadly speaking, we do not see many firms in the energy sector with the growth characteristics that we favour and retain our longstanding underweight. In our view, there are long-term structural headwinds for oil prices from factors such as decarbonisation. We also believe there is scope for productivity improvements in the oil industry—an important influence on the commodity’s price, in our view—to continue for some time. The portfolio is also underweight to the health care space. However, we have identified some stock-specific opportunities; we hold a couple of Chinese pharmaceutical names and a Brazilian hospital company.


Largest Country China 32.79% Was (30-Sep-2021) 31.67%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Emerging Markets Index

Top Contributor^

Net Contribution 0.32%
Selection -0.16%

Top Detractor^

Net Contribution -0.86%


Quarterly Data as of 30-Sep-2021

Largest Overweight

Hong Kong
Fund 4.58%
Indicative Benchmark 0.00%

Largest Underweight

Fund 8.88%
Indicative Benchmark 11.97%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Gonzalo Pángaro, Portfolio Manager ,
We are overweight to the relatively small Argentine market for stock-specific reasons. Our main holding here is in an e-commerce and digital payments platform. We expect the company to become a leading digital provider of financial services in an under-banked region and also think it is well positioned to take advantage of e-commerce growth in Latin America. We also hold an IT services company that we believe is well placed to compound earnings at a relatively high rate for several years.

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 2.01%
Class I $2,500,000 $100,000 $0 0.00% 100 basis points 1.06%
Class Jd $10,000,000 $0 $0 0.00% 0 basis points 0.10%
Class Q $1,000 $100 $100 0.00% 100 basis points 1.10%
Class S $10,000,000 $0 $0 0.00% 0 basis points 0.06%

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