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
  • Ulle Adamson, CFA
  • Managed Fund Since: 04/01/2015
  • Joined Firm On 11/04/2002*
  • M.A., Sussex University; B.Sc., Stockholm School of Economics

* Firm refers to T. Rowe Price Associates and Affiliates
Quarterly Commentaries
as of

Most emerging European equity markets fell in the second quarter. Stocks were pulled lower by political and economic uncertainty in Poland and Turkey and by fears of a possible European economic slowdown triggered by the UK's late-June referendum to leave the European Union. In U.S. dollar terms, shares in Poland and Turkey fell 17% and 8%, respectively. Stocks in oil producer Russia rose 4%, however, as oil prices continued to rebound from 13-year lows reached in the first quarter. Also, Russia's central bank cut interest rates in June and forecast that the economy would return to growth in the second half of 2016.

The Emerging Europe Fund returned −1.74% in the quarter compared with −3.67% for the MSCI Emerging Markets Europe Index and 2.11% for the Lipper Emerging Markets Funds Average. For the 12 months ended June 30, 2016, the fund returned −5.85% versus −11.30% for the MSCI Emerging Markets Europe Index and −10.14% for the Lipper Emerging Markets Funds Average. The fund's average annual total returns were −5.85%, −11.34%, and −4.02% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2016. The fund's expense ratio was 1.76% as of its fiscal year ended October 31, 2015.
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

While our underweighting of the Russian market worked against us, our stock selection in Russia helped our relative performance. Stock selection in Georgia and our deep underweighting in Poland were also beneficial. During the quarter, we reduced our exposure to Austria and Hungary but established some small positions in Greek banks. We also trimmed our exposure to Turkey and reduced our overweight versus the benchmark. Our Russian allocation was 44% of assets, but we continue to underweight Russia versus the index. Our Russian holdings are companies that we believe can manage well through the challenging environment.

We maintain a long-term investment horizon and exposure to well-managed companies that we believe can generate solid earnings growth over time. Current valuations in emerging Europe are compelling in many cases, and we are using market volatility to add to our high-conviction holdings at attractive prices. In Russia, the economy remains highly linked to oil and other commodity prices, and there are various other headwinds. Nevertheless, we are finding some companies that are benefiting from the weaker ruble, the reduced level of competition, or import substitution. Turkey's economic potential is high, but it is being held back by political uncertainty. In Eastern Europe, we continue to like growth prospects in Romania but remain cautious about Poland. As always, we would like to remind our investors that this fund has a high risk/return profile. Because of its narrow geographic focus and relatively small number of holdings, the fund can be extremely volatile and should represent only a small portion of a long-term investor's well-diversified portfolio.

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