El Nio Strikes: Asset Management Giant Uses Climate Models to Position in Emerging Markets

T. Rowe Price is turning to bespoke models to shield its $165 billion emerging-market debt and equity portfolios from an El Nio event expected to be unusually destructive. According to Aaron Gifford, associate director of global sovereign debt research at T. Rowe Price, the planning began when the last El Nio took shape. Two years ago, researchers at his alma mater Johns Hopkins University began developing a climate and weather analysis tool that T. Rowe Price now uses in conjunction with its own econometric analysis. "When I saw the news that another El Nio was coming, it started the ball rolling," said Gifford, who lives in Baltimore. "We started to realize that taking a more rigorous approach at the academic level could really benefit us."