T. Rowe Price recently launched an international fund that will focus on the emerging markets of Africa and the Middle East.
The no-load fund will focus on long-term capital growth by investing in stocks of companies located in the regions of Bahrain, Egypt, Jordan, Kenya, Lebanon, Morocco, Nigeria, Oman, Qatar, South Africa and United Arab Emirates.
The minimum initial investment is $2,500 or $1,000 for individual retirement accounts, and gifts or transfers to minors’ accounts. The fund has a 2% redemption fee.
The fund is managed by 18-year veteran Christopher Alderson, who has led the emerging markets equity team for the past 10 years. “These markets offer significant long-term growth potential and diversification benefits for investors who are willing to accept more risk by placing a portion of their assets in a very aggressive portfolio,” he said.
Financial companies, which represent the largest sector exposure in the fund, are expanding at rapid rates in the areas. The fund also seeks to benefit from increased infrastructure spending of firms, particularly in the Middle East.
“In sum, the region provides opportunities, but only for those prepared for long-term investing with a significant tolerance for risk,” Alderson said.
Regarding opportunities in each region, Africa is benefiting from oil and gas reserves, an increase in real commodity prices, debt forgiveness, and increasing political stability. Alderson notes that excluding South Africa, growth in Sub-Saharan Africa has averaged 7% over the last five years, fueled by the boom in commodity prices.
The increase in oil prices has produced strong economies with substantial current account surpluses in the Gulf Corporation Council, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.