TEMR delivers active emerging markets exposure through T. Rowe Price's fundamental research process, targeting companies across developing economies that the firm's analysts identify as undervalued or possessing superior growth prospects relative to local market peers.
How It Works
The fund employs T. Rowe Price's global analyst network to build a concentrated portfolio of emerging market stocks, typically holding 80-120 positions weighted by conviction rather than market cap. Stock selection emphasizes company-specific factors like management quality, competitive positioning, and financial strength over country allocation, though the fund maintains exposure across major emerging markets including China, India, Brazil, and Southeast Asia.
Key Features
- Active stock selection from T. Rowe's research platform versus passive EM index exposure
- Concentrated portfolio allows meaningful positions in best ideas across emerging markets
- Direct local market access without currency hedging captures full EM growth potential
Risks
- Emerging market volatility can drive 30-40% drawdowns during global risk-off periods
- Currency devaluation risk as unhedged exposure to volatile EM currencies can subtract 10-15% annually
- Active management risk if stock picks underperform broad EM indices by 5-10% in momentum markets
Who Should Own This
Best suited for investors seeking differentiated EM exposure who believe active management can navigate the inefficiencies of developing markets better than cap-weighted indices. Works as a 5-15% satellite position for those comfortable with significant volatility in exchange for potential outperformance versus passive EM funds over full market cycles.