T. Rowe Price Frontier Markets Equity
The T. Rowe Price Frontier Markets Equity fund aims to deliver long-term capital growth by identifying high-quality businesses across under-researched frontier markets. The team’s analysis is supported by deep local engagement, disciplined valuation, and a robust macro and ESG overlay. Their investment style is long-term in nature, favouring low portfolio turnover and a stable basket of quality, growing companies that can navigate the exaggerated economic and political cycles typical of frontier economies.
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Johannes Loefstrand, Fund manager Johannes Loefstrand is the portfolio manager of the T. Rowe Price Frontier Markets Equity fund. His investment career began in 2012, and he joined T. Rowe Price in 2015 as a research analyst covering all sectors in Europe, the Middle East, Africa, and frontier regions within the Emerging Markets Equity division. Prior to this, he worked at Arisaig Partners as an investment analyst. Johannes holds a Master of Laws degree from the London School of Economics and a Bachelor of Laws degree from the University of Groningen in the Netherlands.
Johannes Loefstrand, Fund manager Johannes Loefstrand is the portfolio manager of the T. Rowe Price Frontier Markets Equity fund. His investment career began in 2012, and he joined T. Rowe Price in 2015 as a research analyst covering all sectors in Europe, the Middle East, Africa, and frontier regions within the Emerging Markets Equity division. Prior to this, he worked at Arisaig Partners as an investment analyst. Johannes holds a Master of Laws degree from the London School of Economics and a Bachelor of Laws degree from the University of Groningen in the Netherlands.
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Investment process
T. Rowe Price’s Frontier Markets Equity strategy is built on the belief that frontier equity markets are among the most inefficient globally, offering significant opportunities for active managers with deep regional expertise. These markets often suffer from limited research coverage and high information asymmetry, which the team seeks to exploit through rigorous bottom-up stock selection, supported by macroeconomic analysis and ESG integration.
The investable universe spans over 50 countries and includes more than 500 companies. The fund is unconstrained by market cap or sector and includes developed and emerging market-listed firms with substantial frontier exposure.
Idea generation is collaborative, drawing from T. Rowe Price’s global research platform. This initial screen narrows the universe to approximately 300–400 companies, which are then subject to deep fundamental analysis. Stock selection is guided by a four-pillar bottom-up framework.
The team looks for companies with strong management and prudent capital allocation that are gaining market share. Industry fundamentals are assessed for secular tailwinds, favourable structures, and relevant social and climate factors. Valuation is approached through discounted cash flow modelling and relative comparisons, with a focus on improving liquidity conditions. Near-term expectations such as inflecting growth, operating leverage, and management upgrades are also considered. While bottom-up analysis drives stock selection, top-down macro inputs play a critical role in identifying risks and opportunities.
The team applies a proprietary macro framework to assess each country’s fiscal strength, external balance, and institutional robustness. Based on these anchors, countries are classified into four categories: Frontier Tigers, Regular Frontiers, Unanchored Frontiers, and Wealthy Frontiers. Those with solid anchors and evidence of sustained growth take-off are labelled “Frontier Tigers” and receive the majority of the team’s attention.
Management engagement is central to the strategy, particularly given the information scarcity typical of frontier markets. The final portfolio holds 50-80 stocks.
Risk
Risk management is a core component of the Frontier Markets Equity strategy, with portfolio manager Johannes Loefstrand ultimately responsible for overseeing it. The team employs a multi-layered approach, combining proprietary and third-party systems — including MSCI Barra, Citigroup GRAM, and FactSet—to monitor exposures, factor sensitivities, and performance attribution. ESG risks are tracked using the Responsible Investing Indicator Model (RIIM), which covers over 15,000 companies and flags controversies, targets, and performance metrics. The strategy benefits from close collaboration between equity and fixed income teams, with regular joint meetings and shared macro insights enhancing the robustness of country-level assessments.
ESG
ESG analysis is conducted at two levels: research analysts embed ESG criteria into company valuations and ratings, while the portfolio manager balances ESG exposures across the portfolio. To support this process, the team draws on dedicated in-house ESG specialists who provide company-level and thematic research. A key tool in their framework is the Responsible Investing Indicator Model (RIIM), which systematically flags ESG risks and opportunities across a universe of approximately 15,000 companies. RIIM sources data beyond conventional financial metrics, including performance indicators (such as accident rates and carbon emissions), corporate targets (like diversity initiatives), and incidents or controversies (such as environmental fines or community protests).
The materiality of ESG factors is assessed at the sector and industry level, allowing the team to tailor its analysis to what matters most for each company. These insights feed directly into the risk/reward assessment and can influence both stock selection and portfolio weighting. Ultimately, ESG factors are treated as an integral component of the final investment decision, helping the team identify sustainable growth opportunities while managing long-term risks.
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