This diversified fund provides a diversified entry into emerging market stocks.
T. Rowe Price Latin America (PRLAX)
From Bob Carlson’s Retirement Watch
We own emerging market stocks through T. Rowe Price Latin America (PRLAX). We
added the fund because it looked like the low in commodities had been reached. Commodities have a long-term cycle that shifts from over-investment to under-investment. The over-investment period followed the financial crisis and peaked around 2013. Supplies of most commodities exceeded demand, and producers tried to slash costs and production as prices fell.
We’re now in the under-investment phase. It will take a while before a lot of capital flows into commodities and production increases. In the meantime, global growth will continue to increase demand and increase prices.
T. Rowe Price has a consistent investment process across its funds. The company’s leaders look for growing companies with stocks selling at reasonable prices. PRLAX is another fund that concentrates on its managers’ best ideas and ignores the indexes. The fund owns 48 stocks and has 52% of its assets in its 10 largest positions. Annual turnover is about 23%.
The fund also concentrates on a few sectors. Recently, the fund was 34% in financial services, 24% in consumer defensive stocks and 16% in cyclical companies. PRLAX is invested about 55% in Brazil, 26% in Mexico, 5% in Chile, 5% in Peru and 3.7% in Argentina.
The fund had a strong year. There have been ups and downs lately, based mostly on political events in Brazil. PRLAX is down 0.79 for the last month but up 41.38% for 2016.
Bob C. Carlson, Bob Carlson’s Retirement Watch, www.retirementwatch.com, November 2016