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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.

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Emerging Markets Discovery Equity Fund

Utilises a contrarian approach to invest in undervalued emerging markets companies positioned to benefit from a re-rating thesis for change.

ISIN LU1244138340 Bloomberg TREMVEI: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-Sep-2015

Performance figures calculated in USD

31-Oct-2021 - Ernest Yeung, Portfolio Manager,
Given the pace of vaccination and easing of coronavirus restrictions, we expect economic activity in some emerging market (EM) countries may continue normalising in the next six months, providing a favourable backdrop for value investing. We think "forgotten" EM stocks may be helped by government stimulus policies and "green" infrastructure spending, benefitting traditional industries.
Ernest C. Yeung, CFA
Ernest C. Yeung, CFA, Portfolio Manager

Ernest Yeung is a portfolio manager for the Emerging Markets Discovery Equity Strategy at T. Rowe Price. He was the co-portfolio manager for the International Small-Cap Equity Strategies from 2009 to 2014. Mr. Yeung is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.

Click for Manager Outlook


Manager's Outlook

Value investing has staged an impressive rebound in 2021 on the back of a successful vaccine rollout and strong global economic recovery. We believe accelerating economic activities in EM countries which are emerging from the coronavirus pandemic will provide a favorable backdrop for value investing

We believe that that the goal of carbon neutrality by 2050, (2060 for China) will boost many traditional or old economy industries during the long transition period. To meet green energy and carbon emission targets, the world will need to spend heavily on traditional industrial sectors during the transition years. The massive infrastructure spending in China between 2000 and 2010 was one factor contributing to a decade of outperformance for global value investors.

China's crackdown in the technology, property and education sectors may have spooked investors but we have seen these regulatory cycles repeated every three-to-five years and this is hardly surprising to us. We need to identify these mini cycles as we are confident they will grease the wheels of the economy to allow it to get over the hump.

Renewable energy is not readily available in most EMs, and we believe natural gas will play an important role in the early stages of their transition to cleaner energy.

The post-COVID energy transition is the type of external fundamental change that we seek to leverage under our EM Discovery investment thesis. We believe the world has badly underinvested in this area, and EM countries will likely need to ramp up capital expenditure quickly if net carbon reduction targets are to be met.

The acceleration of new technologies triggered by the pandemic could usher in a period of higher productivity and such periods have tended to favor value stocks, as higher productivity, in turn, can be expected to result in stronger growth in earnings. Our portfolio is well positioned to capture the opportunity in emerging markets, including the transition to green energy. We continue to harness the deep insights and resources of our global research platform. It provides us with an information edge that is crucial in helping us to identify "forgotten" EM companies with solid improvement potential and asymmetric risk reward.

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 widely diversified portfolio of stocks of emerging market companies.

Investment Approach

  • Aim to exploit the valuation anomalies that arise across the diverse and inefficient emerging market opportunity set.
  • Employ a contrarian approach using fundamental research, quantitative screen and industry contacts to identify companies that are out of favour, undervalued and that offer an attractive risk and reward profile.
  • Minimize the risk of value traps by focusing on companies offering yield or a book value anchor to the valuation, and where we have identified re-rating thesis that can lead to an expansion in valuation over time.
  • Risk management is an integral part of the portfolio construction process.
  • 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 50-80 stock portfolio
  • Expected 4-8% tracking error
  • Individual position typically 0.5% to 5%, position sized by prospective risks
  • Country ranges +/-10% absolute deviation from the benchmark
  • Sector ranges +/-15% absolute deviation from the benchmark
  • Reserves are normally less than 5%, max 10%

Annualised Performance

  1 YR 3 YR
5 YR
Since Inception
Since Manager Inception
Fund % 35.82% 11.04% 10.06% 10.60% 10.60%
Indicative Benchmark % 16.96% 12.30% 9.39% 10.07% 10.07%
Excess Return % 18.86% -1.26% 0.67% 0.53% 0.53%

Inception Date 14-Sep-2015

Manager Inception Date 14-Sep-2015

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 % 34.05% 7.76% 9.80% 10.24%
Indicative Benchmark % 18.20% 8.58% 9.23% 10.04%
Excess Return % 15.85% -0.82% 0.57% 0.20%

Inception Date 14-Sep-2015

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 26-Nov-2021 Quarter to DateData as of 26-Nov-2021 Year to DateData as of 26-Nov-2021 1 MonthData as of 31-Oct-2021 3 MonthsData as of 31-Oct-2021
Fund % -3.83% -1.11% 3.72% 2.83% 1.20%
Indicative Benchmark % -3.23% -2.28% -3.50% 0.99% -0.49%
Excess Return % -0.60% 1.17% 7.22% 1.84% 1.69%

Inception Date 14-Sep-2015

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 - Ernest Yeung, Portfolio Manager,
EM equities advanced in October but underperformed the MSCI World Index significantly as China’s economic growth slowed and investors remained concerned about regulatory crackdowns and property sector upheavals in the world’s second largest economy. Surging oil prices once again helped markets in exporting countries as prices hit a seven-year high, but this rally also shone the spotlight on inflation concerns. These worries, along with the slowing U.S. recovery, increased EM volatility amid growing expectations that the U.S. Federal Reserve would reduce monetary support. The portfolio outperformed its benchmark handily as stock selection in India and Mexico provided a boost. Returns were also lifted by a technology conglomerate and a Chinese auto parts supplier. The technology conglomerate benefits mainly from its position in a Chinese technology company which we believe is trading at an attractive discount. The Chinese auto parts supplier we hold has a compelling risk/reward investment thesis, in our view. Relative performance was hampered by our underweight in a Chinese e-commerce platform as concern about Beijing’s crackdown eased, leading to a rebound of its share price. While we are underweight, we have a position as we like its asset-light business model, which we believe is highly cash flow generative and scalable.


Largest Holding Samsung Electronics 4.47% Was (30-Jun-2021) 5.44%
Other View Full Holdings Quarterly data as of  30-Sep-2021
Top 10 Holdings 26.81% View Top 10 Holdings Monthly data as of  31-Oct-2021

Largest Top Contributor^

Sberbank of Russia
% of fund 2.50%

Largest Top Detractor^

Samsung Electronics
% of fund 4.44%

^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

Prosus (N)
Was (30-Jun-2021) 0%

Top Sale

Naspers (E)
Was (30-Jun-2021) 1.98%

Quarterly Data as of 30-Sep-2021

30-Sep-2021 - Ernest Yeung, Portfolio Manager,

We believe the headwinds for value stocks, which drove their past underperformance may turn into tailwinds. The thematic trend of direct stimulus and deglobalisation could help to normalize growth and inflation, which is good for "forgotten" stocks in EM. The transition to ''green''energy targets also remains an opportunity as it could lead to a new investment cycle. In our view, EM companies, which have been disciplined in their capital spending so far, could gain from such opportunities.

The portfolio is leveraged to benefit from this post-pandemic reflationary environment. We particularly like stocks that have undertaken "self-help" measures or those with restructuring stories that will enable them to thrive in a post-pandemic world.� The pandemic has prompted the management teams of EM companies to become more proactive in their restructuring efforts ? cutting costs, selling assets, shifting capacity, and changing their product mix.

Our research has enabled us to find opportunities among these companies.

Consumer Discretionary

We reduced our underweight position in consumer discretionary sector during the quarter and are now broadly neutral versus the benchmark.

  • We bought shares of Prosus, which has a dominant stake in Chinese technology company Tencent, but also offers exposure to other social media ecosystems, classifieds, food delivery businesses and fintech. We believe that Prosus offers an attractive risk/reward profile, as the stock trades at a large discount given its exposure to key underlying asset Tencent. The latter has been under pressure due to regulatory uncertainty in the Chinese technology sector. We switched out of Naspers, the South Africa listed conglomerate that owns 74% of Prosus, which makes up over 99% of Naspers' net asset value and is the driver of the investment case.
  • Tongcheng-Elong generates fast growth from its strong position in capturing the rapid growing travel demand of users in lower-tier Chinese cities, thanks to user traffic of WeChat and hotel inventories supply of We bought shares in the company as we believe its business will recover quickly from COVID-19 given 95% of its revenue is domestic.


We found some opportunities in the financial sector over the quarter, which we believe will benefit from a steepening yield curve, taper-talk, and rate normalization themes.

  • We purchased shares in Prudential to gain exposure to the ASEAN insurance sector; our thesis of simplification has played out after the de-merger and spin-off of Jackson Financial and the capital raising will de-risk the balance sheet and set solvency at very strong levels
  • We also own shares in Hungary's leading bank OTP Bank, and this worked in out positively during the quarter. In the longer term, OTP is a capital optionality story, given excellent internal capital generation. This will likely be utilized to further the bolt-on strategy, with its acquisition of Slovenian lender Nova KBM likely to close in the second quarter of 2022, which has its risks but is value-add in our view.

Real Estate

We see some opportunities in the Chinese property sector in the wake of the panic following missed payments by some borrowers.

  • We acquired shares in property developer Longfor Group during the quarter even as the sector remained in turmoil following a series of defaults. The sell-off in property names upon the rising risk of Evergrande default has created investment opportunities in quality names. We believe many other high-gearing peers will be heavily damaged during this deleveraging cycle, which will benefit high-quality leaders like Longfor. In our view, the stock will benefit from accelerating market share gain, margin recovery, and re-rating out of the tightening cycle.


We increased our underweight position in the IT sector. However, we selectively own companies in the technology supply chain, which we think may underperform in the next 12-18 months, as we are near the peak of the current memory upcycle.

  • The portfolio has a position in Samsung Electronics, the world's largest memory maker, which detracted during the quarter and is expected to continue in that direction as demand should decelerate throughout 2022 on the other side of COVID. However, we see an upcycle in the second half of 2022, and better memory margin stability from 2023.


As the world the transitions to clean energy, there will be more need to spend heavily on commodities like copper, nickel, lithium, aluminum, and natural gas, as alternative energy and electric vehicles are metals-intensive. While a more controversial issue in developed markets, for EM there are also few alternatives to natural gas, the cleanest of the fossil fuels, during the early stages of their fossil fuel transition.

  • We acquired shares in Petronet LNG during the quarter. It is the largest importer of LNG in India.

South Korea

We increased our underweight position in South Korea as we see the semiconductor cycle peaking towards the end of 2021.

  • We sold shares of steelmaker POSCO as we see supply demand tightness cyclically peaking in the next two quarters, a factor which in our view is now built in the price.


Largest Sector Financials 27.09% Was (30-Sep-2021) 28.13%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Emerging Markets Index

Top Contributor^

Industrials & Business Services
Net Contribution 1.27%
Selection 1.19%

Top Detractor^

Consumer Staples
Net Contribution -1.03%


Quarterly Data as of 30-Sep-2021

Largest Overweight

Fund 27.09%
Indicative Benchmark 19.64%

Largest Underweight

Information Technology
Fund 10.98%
Indicative Benchmark 20.62%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Ernest Yeung, Portfolio Manager,
We closed our underweight in consumer discretionary, adding to our position in the internet and auto spaces, increasing our holding in a Chinese auto supplier. We reduced our overweight in financials by managing positions in selected banks, and in an insurer after recent management and agency turnover made its value of new business vulnerable to disappointment, in our view. The financials sector continues to be our largest sector position in both absolute and relative terms. The portfolio is underweight in the information technology sector as our investment criteria favours "forgotten" or out-of-favor stocks with asymmetric risk/reward profiles.


Largest Country China 30.92% Was (30-Sep-2021) 30.64%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2021

Indicative Benchmark: MSCI Emerging Markets Index

Top Contributor^

Net Contribution 3.09%
Selection 2.65%

Top Detractor^

Net Contribution -0.68%


Quarterly Data as of 30-Sep-2021

Largest Overweight

Fund 4.90%
Indicative Benchmark 0.00%

Largest Underweight

Fund 4.35%
Indicative Benchmark 14.52%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Ernest Yeung, Portfolio Manager,
Our China underweight position increased as we cut our holdings in a smartphone acoustic component supplier. We initiated a position in a Chinese e-commerce platform. We also increased our position in a technology conglomerate, which raised our off-benchmark exposure to the Netherlands. We added to our position in a precious metal company in Mexico, where we now have one of our largest country positions in absolute and relative terms.

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%
Class Q $1,000 $100 $100 0.00% 100 basis points 1.17%

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