9
Morningstar FundInvestor
July 2
013
have been quite involved with the fund since the
1990
s, are seasoned and skilled emerging-markets
experts and have a strong support team. They follow
a sound growth strategy, and though they’re not
quite as bold as their predecessor, they’re still willing
to pile into countries and sectors that are packed
with compelling growers. They’ve used this approach
to earn superior results in rallies, and this fund has
posted a
17
.
8%
annualized gain from their April
2009
takeover through June
14
, while its typical peer has
earned a
16
.
1%
annualized return over the period.
This fund also has been more volatile than the group
norm on their watch, though.
Emerging-Asia Plays
Regional emerging-markets funds tend to be concen-
trated by sector and stock as well as by country—so
they are more vulnerable to blowups in particular
areas. That said, the investment universe in emerging
Asia is much larger and more varied than those in
Latin America and other developing regions, and
there are some good Pacific/Asia ex-Japan funds.
Matthews Asian Growth & Income
MACSX
is a
terrific option for those seeking pure emerging-
Asia exposure without taking on a lot of risk. It has a
big expense edge over most of its rivals. It’s run
by two talented Asia specialists who work with an
exceptional team. The managers focus on fairly
conservative securities—dividend-paying equities,
preferred stocks, and convertible bonds—while
scouring the region for opportunities and letting coun-
try and sector weights fall where they may. Because
of the managers’ reserved tastes, this fund has held
up much better than most of its peers in sell-offs
and has been far less volatile than all of its rivals over
time. And thanks to the managers’ execution and
willingness to go their own way, this fund has fared
well enough in choppy markets and moderate rallies
to earn attractive long-term returns, though it has
tended to disappoint in go-go rallies. It also invests
small amounts in Japan, so it’s not a pure emerging-
Asia offering.
Investors seeking a bolder play on the region should
check out
T. Rowe Price New Asia
PRASX
.
Its upside potential is clear. From manager Anh Lu’s
arrival on April
14
,
2009
, through June
14
,
2013
,
the fund has posted a
21
.
1%
annualized gain, while
the average Pacific/Asia ex-Japan fund has posted
a
15
.
3%
annualized return. Lu uses the same sound
growth strategy—and works with the same sup-
port team—that has paid off at T. Rowe Price Emerg-
ing Markets Stock. And this fund has a low expense
ratio, which gives it an ongoing edge. But Lu readily
loads up on countries and sectors that are full of
superior growers—though she is not as bold as her
predecessor—and this fund has been more volatile
than its typical rival on her watch.
œ
Contact Bill Rocco at
Yearly Returns for Emerging Markets
Name
Annual Ret
% 2002
Annual Ret
% 2003
Annual Ret
% 2004
Annual Ret
% 2005
Annual Ret
% 2006
Annual Ret
% 2007
Annual Ret
% 2008
Annual Ret
% 2009
Annual Ret
% 2010
Annual Ret
% 2011
Annual Ret
% 2012
Total Ret
YTD
% (Daily)
Total Ret
Ann.10 Yr
% (Daily)
MSCI Indonesia NR
41.87
76.53
50.64
15.11
73.78
54.17
-56.48 126.24
33.93
6.00
4.65
4.32
24.86
MSCI Turkey NR
-35.83 125.30
41.44
56.06
-7.21
74.09
-62.29
97.51
20.81
-35.41
64.21
-0.38
20.21
MSCI Brazil NR
-30.65 115.01
35.48
56.45
45.30
79.56
-56.21 128.06
6.54
-21.85
0.05
-13.73
20.04
MSCI Thailand NR
27.26 143.51
-1.24
8.72
11.11
46.05
-48.48
76.57
55.71
-2.72
34.53
0.87
19.18
MSCI Mexico NR
-13.31
32.81
48.32
49.11
41.44
12.15
-42.94
56.63
27.61
-12.11
29.06
-6.79
17.36
MSCI India NR
7.90
78.35
19.11
37.57
51.00
73.11
-64.63 102.81
20.95
-37.17
25.97
-5.93
17.12
MSCI China NR
-14.05
87.57
1.89
19.77
82.87
66.24
-50.83
62.29
4.63
-18.41
22.75
-9.35
15.87
MSCI Korea NR
8.29
35.02
22.06
56.97
12.64
31.85
-55.29
71.35
26.74
-12.00
21.18
-11.49
12.40
MSCI Russia NR
15.43
75.08
5.46
73.12
55.60
24.50
-73.88 104.22
19.07
-19.55
13.66
-10.44
9.13
MSCI Taiwan NR
-24.69
41.91
8.99
6.38
19.97
8.38
-46.45
79.21
21.84
-20.89
16.68
0.44
7.27
Data as of June 17, 2013.
The 10-year trailing returns for
emerging-markets funds are
enticing, but they mask enormous
year-to-year and country-to-
country volatility. Be prepared for
a wild ride, especially if you buy
a
regional
or
single-country
fund.
