Any investors hoping to find an International Bond - Emerging fund might consider looking past T. Rowe Price Emerging Markets Bond (PREMX Quick QuotePREMX - Free Report) . PREMX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify PREMX in the International Bond - Emerging category, an area rife with many investment choices. International Bond - Emerging funds focus on fixed income securities from emerging nations from around the globe. This usually results in exposure to economies like China, Brazil, India, South Africa, and Indonesia, just to name a few. Funds here offer geographic diversification, but they can also introduce currency risk into the picture as well.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of PREMX. T. Rowe Price Emerging Markets Bond debuted in December of 1994. Since then, PREMX has accumulated assets of about $1.72 billion, according to the most recently available information. Michael J. Conelius is the fund's current manager and has held that role since December of 1994.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.44%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4%, which places it in the middle third during this time-frame.

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. Compared to the category average of 13.55%, the standard deviation of PREMX over the past three years is 13.2%. Over the past 5 years, the standard deviation of the fund is 10.83% compared to the category average of 11.18%. This makes the fund less volatile than its peers over the past half-decade.

PREMX carries a beta of 1.05, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 1.31, 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 29.76% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 64.68%, 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 0.90% compared to the category average of 1.12%. Looking at the fund from a cost perspective, PREMX is actually cheaper than its peers.

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

Bottom Line

Overall, T. Rowe Price Emerging Markets Bond ( PREMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.