T. Rowe Price has announced the launch of the T. Rowe Price Dynamic Emerging Markets Bond ETF (TDEM) on the Nasdaq today, the company said.
Key Takeaways:
- T. Rowe Price’s new TDEM fund began trading on the Nasdaq as the firm’s 39th actively managed ETF.
- Government, corporate and local currency debt from emerging markets make up the fund, which charges a 0.45% expense ratio.
- Early rate hikes after the pandemic left many emerging economies with more room to cut if growth slows.
The launch brings the firm’s roster of actively managed ETFs to 39, according to the release. Nine of those debuted in 2026.
Emerging markets debt draws on governments and companies facing different growth rates, inflation levels and currency swings. T. Rowe Price says that mix calls for active management, where managers pick holdings instead of tracking an index.
“The complexities of emerging market investing requires active management to navigate divergent growth, inflation, and currency trends,” portfolio manager Leonard Kwan said in the release.
Tim Coyne, T. Rowe Price’s global head of ETFs, echoed that view. “This is an asset class which, in our view, requires active management that’s grounded in deep fundamental research,” he said.
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TDEM aims for steady returns over time, seeking income and capital appreciation, or rising bond prices, according to the release. To get there, it combines sovereign bonds issued by national governments, corporate bonds and local currency bonds. That last group is priced in the issuing country’s own currency rather than U.S. dollars.
The fund’s managers start with a top-down allocation perspective, the firm said. That means they start with big-picture views on economies before choosing how much to hold in each bond type. They also look for relative value, or bonds that appear cheap next to similar debt.
TDEM carries an expense ratio of 0.45%, according to the release. Kwan manages the fund with Samy Muaddi, head of emerging markets for the firm’s fixed income division, and portfolio manager Richard Hall.
Dollar Swings Shape Emerging Markets Bond Returns
Outside forces also shape TDEM’s returns, starting with the U.S. dollar. In a commentary, Ernest Yeung, a portfolio manager of T. Rowe Price’s Emerging Markets Discovery Equity Strategy, called the dollar’s direction the central variable for emerging markets.
“Emerging market cycles have historically turned on currency dynamics,” Yeung wrote. He also pointed out that a strong U.S. growth rebound that lifts the dollar could slow flows into emerging markets.
Bond investors saw that play out this year. Emerging markets debt struggled early in 2026 as the U.S. dollar strengthened, according to Morningstar associate director Tom Murphy. It then rebounded on strong fundamentals and favorable inflation trends.
Many emerging economies also raised interest rates earlier and more aggressively than developed nations after the pandemic, according to Yeung. Brazil’s policy rate, for example, reached the mid-teens. As a result, much of the developing world now has more room to cut rates if growth slows.
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Originally posted on ETF Trends
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