T. Rowe Price Latin America Fund
The T. Rowe Price Latin America Fund (PRLAX) seeks long-term growth of capital by investing “primarily in the common stocks of companies located, or with primary operations, in Latin America.” Under normal circumstances, the fund will invest in at least four countries from the Latin American region. The fund’s primary geographic focus will be on Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela.
Bottom-up stock research, leading to stock selection is the backbone of the fund’s investment process. The fund management team does not aim at a specific geographic exposure; it is primarily driven by stocks deemed suitable to the investment objective of the fund.
The fund’s assets were invested across 48 holdings as of November 2015, and it was managing assets worth $485.1 million. As of its September portfolio, its equity holdings included Grupo Financiero Santander Mexico (BSMX), Banco Santander-Chile (BSAC), Mercadolibre (MELI), Grupo Aval Acciones Y Valores (AVAL), and Grupo Financiero Galicia (GGAL). Its top ten holdings formed 50.9% of its November portfolio.
For this analysis, we’ll be considering holdings as of September 2015, as that’s the latest available sectoral breakdown. The holdings post-September reflect valuation-driven changes to the portfolio, not the actual holdings.
The financials sector dominates the fund’s portfolio, making up 38% of its assets. Consumer staples follows, making up a little less than a quarter of PRLAX’s total holdings. Stocks from the consumer discretionary sector form 15% of the fund’s assets. The fund does not have any exposure to the healthcare sector.
While the consumer staples sector has more or less maintained its exposure to the fund over the past year ended November 2015, financials commands a bigger share than it did a year ago. The consumer discretionary and utilities sectors have also seen their respective portions increase over the period.
PRLAX’s fund manager has exited stocks from the energy and materials sector over the last year. This has reduced their shares of the portfolio, apart from their falling valuations. Industrials has received the same treatment.
How has the fund performed year-to-date through November 2015, and which sectors contributed to that performance? Let’s take a look in the next article.