Back to top

Image: Bigstock

Is T. Rowe Price Emerging Markets Stock (PRMSX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

Having trouble finding a Non US - Equity fund? Well, T. Rowe Price Emerging Markets Stock (PRMSX - Free Report) would not be a good potential starting point right now. PRMSX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

PRMSX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.

History of Fund/Manager

PRMSX is a part of the T. Rowe Price family of funds, a company based out of Baltimore, MD. Since T. Rowe Price Emerging Markets Stock made its debut in March of 1995, PRMSX has garnered more than $759 million in assets. The fund is currently managed by Eric Moffett who has been in charge of the fund since April of 2021.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of -0.93%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -10.15%, which places it in the bottom 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. Compared to the category average of 15.41%, the standard deviation of PRMSX over the past three years is 18.49%. The standard deviation of the fund over the past 5 years is 19.35% compared to the category average of 16.52%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.72, which means it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -11.01. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, PRMSX is a no load fund. It has an expense ratio of 1.22% compared to the category average of 1.01%. From a cost perspective, PRMSX is actually more expensive 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

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

Bottom Line

Overall, T. Rowe Price Emerging Markets Stock ( PRMSX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

Your research on the Non US - Equity 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


T. Rowe Price Emerging Mkts Stk (PRMSX) - free report >>

Published in