Middle East Progress? 5 Ways to Invest

When it comes to the Middle East, there are multitudes of added layers of risk -- geopolitical, currency and compliance, to name a few -- that the average retail investor doesn't understand, says Alan Lancz, president of Alan B. Lancz & Associates of Toldeo, Ohio. Under such circumstances, Lancz advocates active management. That's where the T. Rowe Price Africa & Middle East (TRAMX) fund comes in. Launched in late 2007, the fund lost 53% in 2008, hurt partly by slowing regional economic growth, lower oil prices and reduced liquidity in the banking sector, according to portfolio manager Joseph Rohm. Cut to today and the fund is up nearly 46% in the last three months. Top holdings include companies in Qatar, the United Arab Emirates, Lebanon and Egypt. The net expense ratio of 1.32% seems reasonable given the challenges the region poses; there's no load; and the minimum investment is $2,500. However, as Morningstar analyst William Rocco cautions: "This fund's geographic focus means it's too narrow to be used as a solo emerging-markets holding and should be used in combination with other such funds."