T. Rowe Price Emerging Europe Fund (TREMX)
Ticker Symbol:
Fund Status:
Open to new Retail investors  /  Open to subsequent Retail investments
Fund Management
Fund Manager
  • S. Leigh Innes, CFA
  • Managed Fund Since: 07/02/2007
  • Joined Firm On 08/07/2002*
  • M.A., Oxford University

*Firm refers to T. Rowe Price Associates and Affiliates
Quarterly Commentaries
as of 09/30/2014

Major emerging European markets sank in the third quarter as the situation in Ukraine remained unstable, regional growth faltered, and neighboring eurozone economies weakened. In dollar terms, Russian stocks tumbled 15% as investors shunned Russian assets in response to the ongoing Ukraine crisis and international sanctions. The ruble repeatedly fell to record lows over the quarter. Turkish stocks fell almost 12% as the lira weakened and investors worried about the possible impact of higher U.S. interest rates on its economy next year. Shares in Greece dropped 20%. In central Eastern Europe, stocks in the Czech Republic advanced 5%, but Polish shares fell 2%.

The Emerging Europe Fund returned −13.23% in the quarter compared with −12.15% for the MSCI Emerging Markets Europe Index and −3.42% for the Lipper Emerging Markets Funds Average. For the 12 months ended September 30, 2014, the fund returned −15.82% versus −13.03% for the MSCI Emerging Markets Europe Index and 4.80% for the Lipper Emerging Markets Funds Average. The fund's average annual total returns were −15.82%, 1.04%, and 5.22% for the 1-, 5-, and 10-year periods, respectively, as of September 30, 2014. The fund's expense ratio was 1.47% as of its fiscal year ended October 31, 2013.

For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary and you may have a gain or loss when you sell your shares.
The Emerging Europe Fund charges a 2% redemption fee on shares held 90 days or less. The performance information shown does not reflect the deduction of the redemption fee; if it did, the performance would be lower.

Benchmark Definitions

The fund's relative performance was hurt by lack of exposure to the Czech market and relatively low exposure to Poland. We have been underweighting central Eastern Europe due to relatively weak regional macroeconomic fundamentals. Our stock selection in Russia and an underweight to Greece helped relative results a little. During the quarter, we reduced exposure to Russia, but it remains our largest country allocation. Our Russian investments are either not on the U.S. sanctions list or are not being targeted directly with sanctions. In Turkey, banks are our core holdings.

We are cautious about near-term prospects for emerging Europe. A rapid resolution to the situation in Ukraine seems unlikely, and the Russian economy will probably weaken or stagnate, especially with the risk of additional sanctions. However, the country's fiscal and external accounts should get a boost from weaker ruble. Turkey is a major oil importer and should benefit somewhat from falling oil prices, as well as from additional interest rate reductions intended to spur growth. However, inflation is already high and could increase if rates fall too fast. We continue to monitor regional developments closely, and we are incrementally adding to our high-conviction stocks at the expense of those that we believe are at risk of international sanctions.

See Glossary for additional details on all data elements.