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On the lookout for a International Bond - Emerging fund? Starting with T. Rowe Price Emerging Markets Bond (PREMX - Free Report) is one possibility. PREMX holds 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
PREMX finds itself in the T. Rowe Price family, based out of Baltimore, MD. The T. Rowe Price Emerging Markets Bond made its debut in December of 1994 and PREMX has managed to accumulate roughly $331.00 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
Investors naturally seek funds with strong performance. PREMX has a 5-year annualized total return of 2.64%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.72%, which places it in the middle 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 6.39% compared to the category average of 9.34%. Looking at the past 5 years, the fund's standard deviation is 9.59% compared to the category average of 11.35%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. PREMX has a modified duration of 6.59, which suggests that the fund will decline 6.59% for every hundred-basis-point increase in interest rates.
This fund has a beta of 0.57, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PREMX has a positive alpha of 3.09, 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 44.4% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 48%, giving PREMX an average quality of BBB. This means that it focuses on medium quality securities.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PREMX is a no load fund. It has an expense ratio of 0.98% compared to the category average of 0.93%. Looking at the fund from a cost perspective, PREMX is actually more expensive than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should 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.
For additional information on this product, or to compare it to other mutual funds in the International Bond - Emerging, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
View the Zacks #1 Rank List
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Is PREMX a Strong Bond Fund Right Now?
On the lookout for a International Bond - Emerging fund? Starting with T. Rowe Price Emerging Markets Bond (PREMX - Free Report) is one possibility. PREMX holds 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
PREMX finds itself in the T. Rowe Price family, based out of Baltimore, MD. The T. Rowe Price Emerging Markets Bond made its debut in December of 1994 and PREMX has managed to accumulate roughly $331.00 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
Investors naturally seek funds with strong performance. PREMX has a 5-year annualized total return of 2.64%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.72%, which places it in the middle 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 6.39% compared to the category average of 9.34%. Looking at the past 5 years, the fund's standard deviation is 9.59% compared to the category average of 11.35%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. PREMX has a modified duration of 6.59, which suggests that the fund will decline 6.59% for every hundred-basis-point increase in interest rates.
This fund has a beta of 0.57, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PREMX has a positive alpha of 3.09, 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 44.4% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 48%, giving PREMX an average quality of BBB. This means that it focuses on medium quality securities.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PREMX is a no load fund. It has an expense ratio of 0.98% compared to the category average of 0.93%. Looking at the fund from a cost perspective, PREMX is actually more expensive than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should 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.
For additional information on this product, or to compare it to other mutual funds in the International Bond - Emerging, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.