Countries that lie along the Pacific Rim have grown so dramatically over the last decade that their economies could weather even a recession in the United States, the chief investment officer of T. Rowe Price's new Asia-based stock fund says.
"Ten years ago, when the U.S. sneezed the rest of the world reached for a tissue. But that's changed. The whole Pacific region is feeding on itself now," Martin Wade, president of Rowe Price-Fleming International Inc., a joint venture that manages the fund, said from his office in London Wednesday.
Earlier this month, Baltimore-based T. Rowe Price Associates Inc. introduced the New Asia Fund, the fifth in a series of successful international stock and bond funds managed by the joint venture, which was established in 1979 by T. Rowe Price and Robert Fleming Holdings, a merchant bank based in London with research analysts throughout Asia.
The new fund will invest in the stocks of large and small growth companies in such countries as Australia, India, Indonesia, Thailand and the Philippines. It will not, however, invest in Japan, where the stock market has fallen almost 50 percent since January, Mr. Wade said.
The Fund will emphasize investments in Hong Kong, Australia, Singapore and Malaysia for the time being because those markets are more established, Mr. Wade said.
Although fund managers think Japan eventually will right itself .. economically, "we wanted to offer investors a way to participate in the growth of the Pacific region as a whole without contaminating the product with the Japanese market, about which everybody was very concerned and suspicious," he said.
Rowe Price-Fleming has been offering overseas investmen opportunities since 1980, when it established its International Stock Fund, a broad-based fund that focused on companies around the world. By the end of last month that fund had a five-year annualized return of 20.7 percent, said George A. Murnaghan, the joint venture's Baltimore-based vice president.
In 1986, the T. Rowe Price International Bond Fund, focusing on foreign bond markets, was established. That was followed in late 1988 by the International Discovery Fund, focusing on smaller companies and emerging markets overseas, and in February of this year by the European Stock Fund, Mr. Murnaghan said.
The industry mix in the fund will vary, Mr. Murnaghan said. In Hong Kong, where a capital market is well entrenched, the fund is likely to invest in manufacturing, trading and property development companies, he said, while in countries such as Sri Lanka and Thailand, the investments may focus on more "mundane things."
"In some of these smaller markets, the things the United States is pretty well accustomed to -- sewage systems, for instance -- are at a low level of development. So these are things we may well want to focus on," he said.
The New Asia Fund requires a minimum investment of $2,500, o $1,000 for Individual Retirement Accounts.
It is a no-load fund, which means investors pay no fees to purchase, exchange or redeem shares.