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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.

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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)

11.27%
$6.8m

1YR Return
(View Total Returns)

Manager Tenure

49.34%
1yr

Information Ratio
(5 Years)

Tracking Error
(5 Years)

0.09
5.45%

Inception Date 04-Sep-2007

Performance figures calculated in USD

31-Oct-2021 - Seun Oyegunle, CFA, Portfolio Manager ,
This region offers much scope for economic improvement, driven by the implementation of reforms and growing structural domestic demand. We believe this will translate into strong and sustainable corporate earnings growth in the years ahead. In our view, macroeconomic fundamentals generally remain intact and robust growth will resume on the other side of the crisis.
Seun Oyegunle, CFA
Seun Oyegunle, CFA, Portfolio Manager

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

Click for Manager Outlook
 

Strategy

Manager's Outlook

Against a challenging backdrop, we continue to focus on the long-term fundamentals, and look to hold high conviction ideas, in quality companies that we believe are well-positioned to withstand the current environment and emerge stronger on the other side of the health crisis. 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.

In South Africa, we hold a cautiously positive view for the longer-term outlook. We have seen indications of incremental progress on the anti-corruption agenda and some positive steps towards reform. This has supported business and consumer confidence. Rises in commodity prices this year have been a boon to the economy and South Africa's balance of payments position. While the vaccination rate remains relatively slow, a decline in infections has softened the near-term risk. We focus on our highest conviction ideas, in well-run, quality companies.

Elsewhere in Africa, the removal of an interest rate cap in Kenya in 2019 was a positive catalyst for the market. We focus on high conviction ideas in the market. 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. We are also increasingly cautious on the outlook in Morocco. The country has had a difficult COVID crisis, stimulus measures have been underwhelming and the economy is also tourist dependent. We maintain selective high conviction ideas here.

In the Middle East, oil exporting nations have been challenged by oil price volatility amid the pandemic and associated lockdowns measures around the globe. We are constructive on the Saudi Arabian market, but valuations generally appear expensive. We remain selective on bottom-up ideas. In Qatar, we have seen a normalization in relations with the nation's gulf neighbors. The economy is also likely to be boosted by the World Cup 2022 and significant investments in natural gas projects. We are able to find some attractively valued names in the market.

Overall, we believe the long-term outlook for the Africa and Middle East region remains robust, as we look beyond the impacts of the pandemic. Longer-term 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 likely translate into strong corporate earnings growth that we believe can be sustained by various businesses in the years ahead. We believe 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%

Recent Performance

  Month to DateData as of 03-Dec-2021 Quarter to DateData as of 03-Dec-2021 Year to DateData as of 03-Dec-2021 1 MonthData as of 31-Oct-2021 3 MonthsData as of 31-Oct-2021
Fund % 1.72% 0.33% 26.52% 3.40% 7.83%
Indicative Benchmark % 1.23% -1.58% 21.32% 2.14% 4.99%
Excess Return % 0.49% 1.91% 5.20% 1.26% 2.84%

Inception Date 04-Sep-2007

Indicative Benchmark: Linked Benchmark Net

Indicative Benchmark: Linked Benchmark Net

Performance figures calculated in USD

Sectors

Total
Sectors
11
Largest Sector Financials 45.45% Was (30-Sep-2021) 45.38%
Other View complete Sector Diversification

Monthly Data as of 31-Oct-2021

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

Top Contributor^

Consumer Discretionary
Net Contribution 0.96%
Sector
-1.53%
Selection 2.49%

Top Detractor^

Information Technology
Net Contribution -0.30%
Sector
0.15%
Selection
-0.45%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Consumer Discretionary
By8.05%
Fund 15.06%
Indicative Benchmark 7.00%

Largest Underweight

Materials
By-12.76%
Fund 5.94%
Indicative Benchmark 18.70%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Seun Oyegunle, CFA, Portfolio Manager ,
Overall, the portfolio remains quite defensively positioned. On a sector basis, we have overweight exposures to the consumer discretionary, health care, information technology (IT), and consumer staples sectors. The most significant underweight position is in materials. Within the technology space, we continued to build a position in a provider of IT services. In our view, the company stands to be a beneficiary of several trends in Saudi Arabia, including the digitization of health care, the shift of retailers toward omnichannel approaches, cybersecurity, and a shift to the cloud.

Countries

Total
Countries
11
Largest Country Saudi Arabia 36.84% Was (30-Sep-2021) 34.14%
Other View complete Country Diversification

Monthly Data as of 31-Oct-2021

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

Top Contributor^

South Africa
Net Contribution 2.15%
Country
0.35%
Selection 1.80%

Top Detractor^

Netherlands
Net Contribution -0.90%
Country
-0.90%
Selection
0.00%

^Relative

Quarterly Data as of 30-Sep-2021

Largest Overweight

Netherlands
By4.98%
Fund 4.98%
Indicative Benchmark 0.00%

Largest Underweight

Kuwait
By-6.27%
Fund 0.00%
Indicative Benchmark 6.27%

Monthly Data as of 31-Oct-2021

31-Oct-2021 - Seun Oyegunle, CFA, Portfolio Manager ,
We continued to identify what we believe to be compelling investment opportunities in Saudi Arabia. In October, we participated in the IPO of a developer, investor, and operator of power generation and desalinated water production plants across the Middle East and North Africa, Southern Africa, and South East Asia. The company has announced plans to double its renewable energy portfolio over the next five years, which aligns with the kingdom’s wider goal of diversifying away from fossil fuels.

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.