T. Rowe Price Latin America Fund overview

The T. Rowe Price Latin America Fund (PRLAX) seeks long-term capital growth by investing “primarily in the common stocks of companies located, or with primary operations, in Latin America.” Under normal circumstances, the fund invests in at least four countries from the Latin American region. The fund’s primary geographic focus is 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’s management team does not aim at a specific geographic exposure. It’s primarily driven by stocks deemed suitable to PRLAX’s investment objective.

How Is PRLAX’s Portfolio Positioned Year-to-Date 2016?

PRLAX’s assets were invested across 47 holdings as of April 2016, and it was managing assets worth $572.5 million. As of March, its equity holdings included Banco Santander-Chile (BSAC), Grupo Aval Acciones Y Valores (AVAL), Grupo Financiero Galicia (GGAL), Tenaris (TS), and TIM Participações (TSU). The fund is quite top heavy, with its top ten holdings forming 53.1% of its assets.

Portfolio changes in the T. Rowe Price Latin America Fund

The financials, consumer staples, and consumer discretionary sectors primarily determine how PRLAX performs, as they form a combined 78% of the fund’s portfolio. Financials stocks alone make up 40% of PRLAX’s assets. The fund does not have any exposure to the healthcare sector.

Compared to a year ago, financials stocks occupy a bigger chunk of PRLAX at present. Among the consumer-oriented sectors, the fund’s management has increased its exposure to consumer discretionary stocks while reducing its exposure to consumer staples stocks. However, consumer staples still remains the dominant sector between the two.

In the year leading up to April 2016, the fund’s management sharply reduced its exposure to energy sector stocks. A year ago, energy stocks formed 5% of PRLAX’s assets. Now, they form less than 1%. In the same period, industrials and utilities stocks have seen their respective shares rise, while information technology and telecommunications services stocks have seen their shares fall.

How did the fund perform in the first part of 2016, and which sectors contributed to that performance? Let’s look at that in the next article.

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