Emerging Markets Discovery Equity Fund

Capital at risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

The listed funds are not an exhaustive list of funds available. Visit www.funds.troweprice.com to see the full range of funds offered by T. Rowe Price, including those that consider environmental and social characteristics as part of their investment process. For up to date information regarding any T. Rowe Price fund's investment strategy, please see the relevant fund KID and prospectus.

Overview

Manager's Outlook

We believe that EMs are structurally stronger than in the past and will benefit from increased capital expenditure from corporates, which have in recent years largely been spending on maintenance and which now need to ramp up investment spending for expansion. EMs will also likely benefit from the green energy transition as there is greater focus on environmental protection and the need to offset climate change. This in turn is expected to yield many investment opportunities in traditional or "forgotten" sectors. We think this could be the start of a multi-year investment and capital expenditure cycle as companies have been underinvesting while heightened geopolitical tensions could trigger a change in global supply chains to increase their resilience.

�

This favourable economic backdrop should continue to support a "Value" investment style change in emerging markets, in our view. We think the recent outperformance of value stocks over growth stocks is a sustainable trend given that the valuation gap between the two styles remains wide by historical standards.

�

In China, where the portfolio has the largest exposure, the regulatory cycle is cyclical in nature and is approaching an inflexion point. As the cycle fades, we see support emerging from stimulus policies and easing of restrictions. However, such incremental support will likely be selective and will only target certain sectors. An unanticipated slowdown in China is a key risk, but underinvestment in recent years should present an opportunity for traditional industries.

�

We believe there are ample opportunities in EM for us to identify pockets of "forgotten" stocks with asymmetrical risk-return profiles, where fundamental changes or operational improvements may drive a re-rating, with potential downside support from solid balance sheets and/or healthy dividends. The portfolio is designed to take advantage of an expanded and evolving universe of "forgotten stocks" in EM that we believe are under-owned and under-researched by mainstream investors and which have asymmetrical risk-return profiles and positive self-help stories. We think these businesses are poised for positive fundamental change or operational improvements that should lead to higher valuations over time.

Strategy

Fund Summary

We look for signs of positive fundamental change among stable, but unloved, businesses that we believe are facing unwarranted scepticism from investors. Meeting company management is central to our approach, as we aim to identify quality teams with strategic vision, a roadmap for success and the ability to execute. The promotion of environmental and/or social characteristics is achieved through the fund's commitment to maintain at least 10% of the value of its portfolio invested in Sustainable Investments, as defined by the SFDR. Additionally, we apply a proprietary responsible screen (exclusion list). The manager is not constrained by the fund’s benchmark, which is used for performance comparison purposes only.

31-Jan-2024 - Ernest Yeung, Portfolio Manager,

Financials remains our biggest absolute allocation and our largest overweight versus the benchmark. We added to several of our emerging market bank holdings, which we believe have strong capital buffers, low-risk balance sheets, and high-quality franchises, positioning them well to gain market share and accelerate loan growth. We also have a considerable absolute allocation in consumer discretionary, where we own “forgotten” names with self-help stories and idiosyncratic drivers. Recently, we further increased our exposure to consumer discretionary by buying more shares in several of our South Korean and Chinese holdings within the auto supply chain and travel sectors.

31-Jan-2024 - Ernest Yeung, Portfolio Manager,

China remains the portfolio’s biggest country position in absolute terms, but we reduced our overall exposure over the month after we sold our stake in a food and beverage business. We think that cyclical and structural headwinds could pressure the company’s revenues, while margin expansion may moderate amid rising input costs. Elsewhere, we raised our allocation and overweight exposure to Thailand by initiating a position in a major telecommunications company. We believe that the recent wave of consolidation within the Thai telecoms segment could generate value.

Past performance is not a reliable indicator of future performance.

The Funds are sub-funds of the T. Rowe Price Funds SICAV, a Luxembourg investment company with variable capital which is registered with Commission de Surveillance du Secteur Financier and which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). Full details of the objectives, investment policies and risks are located in the prospectus which is available with the key investor information documents and/or key information document (KID) in English and in an official language of the jurisdictions in which the Funds are registered for public sale, together with the articles of incorporation and the annual and semi-annual reports (together “Fund Documents”). Any decision to invest should be made on the basis of the Fund Documents which are available free of charge from the local representative, local information/paying agent or from authorised distributors. They can also be found along with a summary of investor rights in English at www.troweprice.com. The Management Company reserves the right to terminate marketing arrangements.

Hedged share classes (denoted by 'h') utilise investment techniques to mitigate currency risk between the underlying investment currency(ies) of the fund and the currency of the hedged share class. The costs of doing so will be borne by the share class and there is no guarantee that such hedging will be effective.

Before deciding to invest in the fund, you should read the offering document/prospectus (including its investment objectives, policies and any risk warnings) which are available and may be obtained from any appointed distributors.

The specific securities identified and described in this website do not represent all of the securities purchased, sold, or recommended for the sub-fund and no assumptions should be made that the securities identified and discussed were or will be profitable.

A full list of the currently issued Share Classes including Distributing, Hedged, and Accumulating Categories may be obtained, free of charge and upon request, from the registered office of the Company.

Benchmark: Investors may use the benchmark to compare the fund’s performance. The benchmark has been selected because it is similar to the investment universe used by the investment manager and therefore acts as an appropriate comparator. The investment manager is not constrained by any country, sector and/or individual security weightings relative to the benchmark and has complete freedom to invest in securities that do not form part of the benchmark.

Disclosure on Vendor Indices can be found here.

This product is based overseas and is not subject to UK sustainable investment labelling and disclosure requirements.

Risks

Typical Investor

Commentary for