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Sizing up the T. Rowe Price Africa & Middle East Fund

David Ashworth - Author
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Nov. 20 2020, Updated 2:49 p.m. ET

Africa and the Middle East

Africa and the Middle East are not generally the first to come to mind when we talk about investments. However, Africa can present opportunities for the long-term, given its abundant natural resources, because its potential is just beginning to be explored. That South Africa joined the BRIC (Brazil, Russia, India, and China) bloc in 2010 also speaks volumes about the potential there is in countries from the continent.

Although oil prices (CVX) (COP) have hurt Middle Eastern countries, a rebound stands to benefit them the most, apart from countries like Russia. However, you should consider fundamental prospects more closely if you intend to invest in companies from this region.

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T. Rowe Price Africa & Middle East Fund

The T. Rowe Price Africa & Middle East Fund (TRAMX) helps you invest in companies from Africa and the Middle East. Depending on market conditions, the fund invests in between 50 and 80 companies, though this may vary significantly. Countries whose companies are of primary importance to fund management include Kenya and South Africa, as well as Saudi Arabia and the UAE (United Arab Emirates) from the Middle East.

TRAMX is the youngest of the five in this series, having been launched in September 2007. As of the end of October 2015, it was managing assets worth $156.7 million. As of the end of September, TRAMX had a total of 70 holdings in its portfolio.

Sectoral breakdown and performance of TRAMX

According to the latest available sectoral breakdown with us, the focus of the fund is on stocks from the financial sector, which represents over 40% of the fund’s total portfolio. The consumer discretionary and consumer staples sectors are a distant second and third, respectively.

Companies from South Africa make up 36.8% of the fund’s total assets, followed by those from Saudi Arabia and Egypt, which comprise a combined 31.7% of the portfolio.

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South Africa-based Naspers Limited is the fund’s largest holding, making up 8.3% of the fund’s total portfolio. Commercial International Bank SAE (Egypt) and Aspen Pharmacare Holdings Limited represent the other two members of the fund’s top three individual holdings. The fund’s top ten holdings make up 37.3% of the fund’s assets. But well-known companies like AngloGold Ashanti (AU), Gold Fields (GFI), and Sasol (SSL) do not form part of TRAMX’s holdings.

For the YTD (year-to-date) period that ended on November 27, the fund fell by 15.2%, whereas for the one-year period that ended on the same date, it fell by 19.5%.

Fees and minimums of TRAMX

TRAMX requires a minimum initial investment of $2,500. If you wish to add to your account, you need to do so in increments of $100. The expense ratio of the fund is 1.42%, and it doesn’t charge any distribution fees, 12b-1 fees, or a sales load. However, it does charge a redemption fee of 2% of the amount redeemed if such a request is received within 90 days of purchase.

You can read about our mutual funds at Market Realist’s mutual funds page.

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