The T. Rowe Price Emerging Market Local Currency Bond Fund (MUTF: PRELX) is a new mutual fund that was launched in May 2011. It’s designed to generate high current income aby investing in bonds that are denominated in the currency of emerging market countries.
The T. Rowe Price mutual fund is not for the risk averse IRA or 401k investor, given the high-risk approach to income from bonds issued by foreign countries, including some in nations with political unrest. But the aggressive nature of this bond fund may provide significant potential to investors looking for a more volatile investment with the potential for bigger rewards.
Here are the specifics for the T. Rowe Price Emerging Market Local Currency Bond Fund for today’s mutual fund spotlight:
Investing Strategy: The fund invests in currency bonds issued by governments and corporations of emerging markets, including Latin America, Europe, Africa and the Middle East. Every cent of the Fund’s assets are in foreign currency bonds.
Expense Ratio: With an expense ratio of 1.21%, the fund is expensive, but even more so with a 2% redemption fee for investors who withdraw funds within 90 days or less. However, to protect the interests of the fund’s shareholders T. Rowe Price Associates state that they will waive through April 30, 2014, its fees and/or bear any expenses that would cause the fund’s expense ratio to exceed 1.10%. The fund is not yet rated.
Top 5 Holdings: The top holdings in the T. Rowe Price Emerging Local Currency Bond Fund include 10% Brazilian National Notes, 10% Brazil National Notes Series F, 12% Columbian Government International Bonds, 10% Indonesia Treasury Bonds, and 8% Mexican Bonds.
Returns: The fund was launch in May 2011. As of July 1, 2011 its 30-day yield was 4.42% before expenses.
Other Fund Statistics
- Total Assets: $12.94 million (as of 7/1/11)
- Minimum Investment: $2,500
- Fund manager: Christopher J. Rothery and Andrew Keirle
- Manager’s Tenure: Since May 2011
