Oak Ridge Dynamic Small Cap I (ORSIX) — launched in September 2015 — seeks to capitalize...
World-Stock Fund Favorites
09/23/2014 10:00 am EST
The world has gone global; talk with a fund manager and he or she will discuss the best companies with little regard to locale, observes Russel Kinnel, editor of Morningstar FundInvestor.
This is why world-stock funds make so much sense. The desire to keep things in tidy buckets is why they get so little love. But that’s all the more opportunity for those who don’t mind a little untidiness. Here are some of the best.
Harding Loevner Global Equity (HLMGX) has just $800 million in assets, though it is widely available in No Transaction Fee supermarkets.
The fund is run by two lead managers, each of whom has three decades of investing experience. Ferrill Roll and Peter Baughan ply a focused blue-chip growth strategy; healthcare and tech account for the largest sectors.
The fund has really made its name by holding up well in down markets like 2007, 2008, and 2011. That owes to attention to debt, valuations, and quality. The fund boasts the lowest downside capture (75% for ten years) of the world-stock funds highlighted here.
American Funds Capital World Growth & Income (CWGIX) is a massive $90 billion fund, but it too seeks blue chips at decent valuations. However, it has an income demand that leads it to own more value stocks.
Its 2.16% trailing 12-month yield is pretty good in this low-yield environment. With a big asset base, low costs, and a deep team, it’s a good choice for people who want low-maintenance investments that don’t change much.
Oakmark Global (OAKGX) is very much a blend fund. Clyde McGregor and Rob Taylor run a tight portfolio of just 43 stocks. They look for strong franchises at low valuations.
The most striking thing about their portfolio, though, is how much is outside of the EuroZone. The United States, Japan, and Switzerland dominate their portfolio.
A focused portfolio means some rough years, like the 12% loss in 2011, but this fund’s 10-year return is the best in the group.
Artisan Global Opportunities (ARTRX) has the strongest growth bias of these funds. It’s run by Artisan’s growth team; its lead manager is James Hamel, who has four co-managers. Their approach is to look for companies with accelerating growth and clean balance sheets.
Naturally, such attractive companies don’t come cheap, and this fund does come with rather high valuations. Still, the fund has fared quite well since it was launched in 2008, and the growth team has produced excellent results since it was formed in 1997.
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