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FOCUSED ON THE FUTURE
Emerging and frontier markets likely will continue to offer a broad range of challenges and opportunities for investors. "We've been focused on these markets for a long time, and we understand the risks and the opportunities," Alderson says. "Our research platform today is very comprehensive. We have more analysts located outside the U.S. than inside—and they are split among London, Hong Kong, Singapore, Tokyo, and Sydney." The majority of T. Rowe Price mutual funds are actively managed. And this approach is what often gives the firm a competitive advantage. Building and maintaining active portfolios involves much more than gathering data and research in isolation. "Our investment professionals could sit in their offices in London or New York and wait for management at companies to visit them, but there's just no substitute for the knowledge you can gain by going to see their operations in person."
Note that investments in emerging markets are subject to abrupt and severe price declines. The economic and political structures of developing nations, in most cases, do not compare favorably with the U.S. or other developed countries in terms of wealth and stability, and their financial markets often lack liquidity. Share prices are subject to market risk, as well as risks associated with unfavorable currency exchange rates and political or economic uncertainty abroad.