Financial Planning - November 2012

portfolio
Emerging Opportunities
FUND MANAGER PROFILE
Despite turmoil, Africa and the Middle East have solid, long-term
investment prospects, says the manager of the T. Rowe Price
Africa & Middle East Fund. By Ilana Polyak

For close to two years, the dominant heme in the Middle East has been the Arab Spring. While the shift oward democracy has been thrilling for many watching the political change, for investors in the region, it hasn’t amounted to much.

“The Arab Spring so far has only affected the countries that aren’t really investable,” says Oliver Bell, manager of the $150 million T. Rowe Price Africa & Middle East Fund. The markets of countries like Egypt, Libya, Syria and Tunisia are so small that they don’t have much to offer investors.

But as a whole, Africa and the Middle East represent a tantalizing investing opportunity, Bell contends. In many ways, he says, these frontier markets are where China, Brazil and India, the big dogs of the emerging market sector, were 25 years ago. And if Africa and the Middle East follow in the footsteps of the renowned BRIC nations, patient investors could be well rewarded.

What has Bell so enthusiastic? In a word,
demographics. Within the investing universe
that his fund is allowed to explore, “you have
65 countries with more than a billion people,
60% of whom are under the age of 24,” Bell
says. “Fast forward to 2025, and just think of
the number of working people this region will
have. This is a multi-decade story.”
With geographic and cultural diversity,
the area gives Bell plenty of places to maneu-
ver if political hot spots flare up. “If something
is happening in Syria, it doesn’t necessarily
impact the other countries,” he says.

A FUND TURNAROUND

But Bell, who moved to T. Rowe Price from the asset management wing of the Swiss bank Pictet, where he ran a portfolio invested in the same region, has already started to turn things around. The fund’s third manager, Bell steered the fund to a 16.2% gain in the year that ended on Oct. 15, a period that correlates with his tenure. That has landed the fund in the top 5% of the emerging markets category, according to Morningstar.

Bell has been helped by the markets themselves. MSCI’s Frontier Market Africa index rose almost 50% in the 12 months through Oct. 15. As growth has sputtered in more developed markets, investors are looking toward new investing opportunities.

Bell, who spent a short time in Saudi Arabia as a child, came to investing in Africa and

oliver
Bell
T.Rowe Price Africa &
Middle East Fund
Age: 43
Credentials: B.S. in
chemistry, University of
Exeter
Experience: Portfolio
manager, T. Rowe Price
Africa & Middle East
fund (2011–present);
emerging markets re-
search manager, Pictet
Asset Management
(1997–2011); scientific
publishing (1992–1997)
Ticker: TRAMX
Inception of fund:
September 2007
Style: Diversified
emerging markets
AUM: $150 million
Three- and five-year
performance as of
Oct. 15: 0.97%, - 5.76%
Expense ratio: 1.50%
Front load: None
Minimum investment:
$2,500
Alpha: -0.88 vs. MSCI
Emerging Markets