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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

Middle East & Africa Equity Fund

Unconstrained, growth-orientated investing in the under explored markets of the Middle East and Africa.

ISIN LU0310188205 Bloomberg TRPMEAI:LX

3YR Return Annualised
(View Total Returns)

Total Assets
(USD)

-1.98%
$5.2m

1YR Return
(View Total Returns)

Manager Tenure

-4.56%
<1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

-0.23
5.31%

Inception Date 04-Sep-2007

Performance figures calculated in USD

Other Literature

31-Dec-2020 - Seun Oyegunle, CFA, Portfolio Manager ,
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 is likely to be driven by some of the world’s most attractive demographics, rising urbanisation and levels of infrastructure investment, and a strong asset base in natural resources. In our view, there is much scope for economic improvement, boosted by the implementation of reforms and growing structural domestic demand.
Seun Oyegunle, CFA
Seun Oyegunle, CFA, Portfolio Manager

Seun Oyegunle is the co-portfolio manager of the Africa & Middle East Fund in the Equity Division.

 

Strategy

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 % -4.56% -1.98% 4.42% 3.28% 5.92%
Indicative Benchmark % -2.54% -0.47% 5.63% 1.82% 3.70%
Excess Return % -2.02% -1.51% -1.21% 1.46% 2.22%

Inception Date 04-Sep-2007

Manager Inception Date 10-Oct-2011

Indicative Benchmark: Linked Benchmark Net

Data as of 31-Dec-2020

Performance figures calculated in USD

  1 YR 3 YR
Annualised
5 YR
Annualised
10 YR
Annualised
Fund % -4.56% -1.98% 4.42% 3.28%
Indicative Benchmark % -2.54% -0.47% 5.63% 1.82%
Excess Return % -2.02% -1.51% -1.21% 1.46%

Inception Date 04-Sep-2007

Indicative Benchmark: Linked Benchmark Net

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 % 2.06% 2.06% 2.06% 5.11% 15.73%
Indicative Benchmark % 2.26% 2.26% 2.26% 4.26% 12.29%
Excess Return % -0.20% -0.20% -0.20% 0.85% 3.44%

Inception Date 04-Sep-2007

Indicative Benchmark: Linked Benchmark Net

Indicative Benchmark: Linked Benchmark 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.

Index returns shown with reinvestment of dividends after the deduction of withholding taxes. 

Effective 30 September 2010, the benchmark for the sub-fund was changed to S&P Emerging Market/Frontier Middle East & Africa Broad Market Index ex Israel. Prior to 30 September 2010, the benchmark for the sub-fund was MSCI Arabian Markets and Africa Index. Prior to 1 July 2009, the benchmark for the sub-fund was S&P IFCG Africa and Middle East ex-Saudi Arabia and ex-Israel. Prior to 1 September 2008, this benchmark also excluded Kuwait. The benchmark changes were made because the portfolio manager viewed the new benchmark composition to be a better representation of the investment strategy of the sub-fund. Historical benchmark representations have not been restated.

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-Dec-2020 - Seun Oyegunle, CFA, Portfolio Manager ,
Middle Eastern and African equities continued to rise in December, alongside both their emerging and developed market peers. South Africa was one of the best-performing markets within the regional benchmark index. The country’s bank stocks were particularly strong, buoyed by an upgrade from a local ratings agency. Hopes that the secretary general of the African National Congress could be suspended on corruption charges also supported the market. In contrast, Saudi Arabia underperformed its benchmark peers, as the government suspended international flights on a temporary basis in a bid to contain the coronavirus. The kingdom’s 2021 budget was announced, with sharply lower spending in a bid to control the large deficit that has resulted from lower oil revenues. Within the portfolio, financials had a significant positive impact on performance, mainly due to our holdings in several South African banks such as FirstRand and Capitec Bank. Shares in the latter continued to recover on the back of improving results. The company is winning market share from domestic-banking peers and deepening product penetration in its current retail client base.

Holdings

Total
Holdings
47
Largest Holding Naspers 9.10% Was (30-Sep-2020) 9.62%
Other View Full Holdings Quarterly data as of  31-Dec-2020
Top 10 Holdings 50.12% View Top 10 Holdings Monthly data as of  31-Dec-2020

Largest Top Contributor^

Naspers
By 0.13%
% of fund 9.01%

Largest Top Detractor^

Qatar National Bank
By -2.26%
% of fund 4.09%

^Absolute

Quarterly Data as of 31-Dec-2020

Top Purchase

Emirates NBD (N)
1.82%
Was (30-Sep-2020) 0%

Top Sale

National Bank of Kuwait
1.22%
Was (30-Sep-2020) 5.97%

Quarterly Data as of 31-Dec-2020

30-Sep-2020 - Oliver Bell, Portfolio Manager ,

We�shifted some of our exposure�in South Africa, particularly in financials, and continued to build our exposure to Saudi Arabia, although we remain significantly underweight. We increased the portfolio's exposure to materials and adjusted positioning within financials.

Saudi Arabia

Although we retained a significant underweight position in Saudi Arabia, we increased our exposure to this market over the course of the third quarter. In addition to increasing the size of our holding in National Commercial Bank, as described below, we also raised our position in consumer-oriented United Electronics. These purchases were partially funded through eliminating our holding in Saudi British Bank, a corporate and retail bank.

  • United Electronics engages in the wholesale and retail trading of electronics, home appliances, and communications solutions. In our opinion, it is one of the best-run consumer companies with a strong online presence and an emerging disruptive consumer finance business. We believe that market consolidation has the potential to partially offset headwinds from austerity and VAT.
  • While we believe that Saudi British Bank is well managed, we have concerns about asset quality and incremental provisioning needs, particularly in the contracting and manufacturing segments. In our opinion, shares reached a fair valuation point over the quarter, and we chose to sell out of our holding and focus on higher-conviction names within financials.

South Africa

The portfolio is overweight South Africa, but over the course of the review period, we�made a number of changes to our position, mainly through selling some of our financials exposure.

  • We eliminated our holding in Absa, South Africa's third-largest bank. Absa offers a complete range of retail, business, corporate, and investment banking; insurance; and wealth management products and services. We believe that shares reached a fair valuation over the period. We also have concerns around the bank's ability to navigate the difficult top-down environment in South Africa and view its balance sheet as being of lower quality than peers.
  • We reduced our holding in Sanlam, a South African diversified financial services group that provides financial solutions to individual and institutional clients. The company reported disappointing second-quarter results. Coronavirus-related business impacts and any potential credit-related provision could provide further headwinds for the stock.

Kuwait

Over the course of the third quarter, we modestly reduced our overall exposure to Kuwait as we believe that the market is more likely to be adversely affected by the impact of the pandemic than other Gulf Cooperation Council markets due to lower stimulus measures. We sold out of Mabanee, a Kuwaiti real estate investor, developer, and project manager. The stock had performed well for the portfolio in 2019, as the expansion of The Avenues Kuwait shopping and entertainment retail venue was completed.

Financials

As the third quarter began, the portfolio had an overweight position in financials, and over the review period, we adjusted this exposure through positions in National Commercial Bank and Ninety One.

  • We added to our existing holding in National Commercial Bank, Saudi Arabia's largest bank by total assets. The bank is, in our view, best in class and has exposure to the most attractive and fastest-growing mortgage segment in the country. Despite headwinds from COVID-19 (the disease caused by the coronavirus), falling oil prices, and lower rates, we believe this bank is well positioned to withstand the current challenging period and maintain its strong position within the market.
  • We added a new holding in asset management firm Ninety One. The founder-led firm, that has a dual listing in the UK and South Africa, is diversified by both geographies and product, which adds a defensive nature across cycles. Although the coronavirus is likely to weigh on assets under management and revenues in the near term, the firm has a solid track record of net inflows and a strong balance sheet. Furthermore, we see the firm as a potential target for ongoing industry consolidation over the longer term.

Materials

We retained a considerable underweight position in the materials sector, but over the course of the third quarter, we modestly raised our exposure where we saw a compelling opportunity. We initiated a position in Mondi, a paper and packaging company, which has a South African listing. The company is exceptionally well managed, in our opinion, and with a strong collection of assets. In terms of its cost position, we believe Mondi has a durable moat that should allow rents to accrue to the company over the cycle. Furthermore, Mondi is a beneficiary of two long-term trends. The first is the movement away from plastic to paper packaging, and the second is paper/board cost curve inflation, driven by increasingly expensive capital and tightness in the fiber (wood supply) in Europe.

Sectors

Total
Sectors
9
Largest Sector Financials 43.66% Was (30-Nov-2020) 42.37%
Other View complete Sector Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI Arabian Markets & Africa 10/40 IMI Index

Top Contributor^

Financials
Net Contribution 1.40%
Sector
0.03%
Selection 1.37%

Top Detractor^

Real Estate
Net Contribution -0.22%
Sector
-0.26%
Selection
0.04%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

Consumer Staples
By5.85%
Fund 11.35%
Indicative Benchmark 5.50%

Largest Underweight

Materials
By-11.45%
Fund 6.99%
Indicative Benchmark 18.44%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Seun Oyegunle, CFA, Portfolio Manager ,
We have an overweight position in the financial services sector and we continued to find opportunities within this area. Recently, we initiated a position in what, in our view, is one of the strongest corporate and retail banks in Saudi Arabia. We believe the bank is well-managed and that it is well placed to benefit from forthcoming corporate growth over the medium-term. The recent merger also provides upside potential due to cost and funding synergies. Beyond financials, other portfolio sector overweight positions include consumer staples and discretionary.

Countries

Total
Countries
13
Largest Country South Africa 32.14% Was (30-Nov-2020) 31.66%
Other View complete Country Diversification

Monthly Data as of 31-Dec-2020

Indicative Benchmark: MSCI Arabian Markets & Africa 10/40 IMI Index

Top Contributor^

Saudi Arabia
Net Contribution 2.19%
Country
0.42%
Selection 1.76%

Top Detractor^

Kenya
Net Contribution -0.29%
Country
-0.14%
Selection
-0.16%

^Relative

Quarterly Data as of 31-Dec-2020

Largest Overweight

United Kingdom
By7.82%
Fund 7.82%
Indicative Benchmark 0.00%

Largest Underweight

Saudi Arabia
By-6.06%
Fund 29.08%
Indicative Benchmark 35.14%

Monthly Data as of 31-Dec-2020

31-Dec-2020 - Seun Oyegunle, CFA, Portfolio Manager ,
The portfolio’s main country overweight positions include Morocco, Egypt, and the United Arab Emirates. In December we further raised our exposure to Egypt, adding to our existing holding in a woman-led medical diagnostics specialist. The company operates primarily in Egypt, Jordan, and Nigeria and is, in our view, the largest and best-positioned player in Egypt’s rapidly growing independent chain diagnostics market. We believe the firm has strong governance and trades at an unwarranted valuation discount to its peers.

Team (As of 15-Jan-2021)

Seun Oyegunle, CFA

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 manager
    since
    2020
  • Years at
    T. Rowe Price
    7
  • Years investment
    experience
    11

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.