Mutual Funds

T. Rowe Price Emerging Markets Stock

April 2009

After years of sizzling performance, emerging-markets stocks were crushed in 2008 as panicked investors stampeded for the exits. Gonzalo Pangaro, who co-manages T. Rowe Price Emerging Markets Stock (PRMSX) with Chris Alderson, still thinks favorable demographics, urbanization and higher economic growth are structural trends that bode well for the developing world over the long run. The problem is the present situation: Robust growth cannot resume until the U.S and the global economy stabilize, Pangaro says.

So what does he like? Latin American countries such as Brazil and Mexico have learned from previous financial crises. That gives Pangaro more confidence in their ability to withstand banking, fiscal and foreign-currency challenges than, for instance, emerging nations in Eastern Europe. In Asia, the fund is leaning away from export-oriented economies, such as Taiwan and South Korea, and favoring the populous giants, China and India.

Read about all of the Kiplinger 25 funds.

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