If you've been stuck searching for International Bond - Emerging funds, consider T. Rowe Price Emerging Markets Bond (PREMX Quick QuotePREMX - Free Report) as a possibility. PREMX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that PREMX is a International Bond - Emerging option, which is loaded with different choices. International Bond - Emerging funds focus on fixed income securities from a variety of emerging international markets. Typically, investors can expect exposure to economies like China, Brazil, India, South Africa, Indonesia, and many others. These funds are appealing because of their geographic diversification, but this can also mean that currency risk is a factor.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PREMX. The T. Rowe Price Emerging Markets Bond made its debut in December of 1994 and PREMX has managed to accumulate roughly $345.00 million in assets, as of the most recently available information. The fund's current manager, Samy Muaddi, has been in charge of the fund since June of 2020.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 2.35%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 11.25%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of PREMX over the past three years is 6.48% compared to the category average of 10.21%. The fund's standard deviation over the past 5 years is 9.67% compared to the category average of 11.73%. This makes the fund less volatile than its peers over the past half-decade.

Bond Duration

Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.

If you believe interest rates will rise, this is an important factor to look at. PREMX has a modified duration of 6.74, which suggests that the fund will decline 6.74% for every hundred-basis-point increase in interest rates.

Income

We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 5.86% means that a $10,000 investment should result in a yearly payout of $586.

If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond. Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks.

With a beta of 0.49, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PREMX has a positive alpha of 3.46 , which measures performance on a risk-adjusted basis.

Ratings

Investors should also consider a bond's rating, which is a grade "AAA" to "D" given to a bond that indicates its credit quality. With this letter scale in mind, PREMX has 38.41% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 53.33%, giving PREMX an average quality of BBB. This means that it focuses on medium quality securities.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PREMX is a no load fund. It has an expense ratio of 0.99% compared to the category average of 0.94%. Looking at the fund from a cost perspective, PREMX is actually more expensive than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, T. Rowe Price Emerging Markets Bond ( PREMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.

Your research on the International Bond - Emerging segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.