18
Let’s take a look at our world-stock ratings to illustrate
how we make the cuts from Gold to Silver and on
down the line.
Gold-rated
Dodge & Cox Global Stock
DODWX
exemplifies the good fundamentals we seek in our
forward-looking ratings. It has skilled, stable
management, a sound strategy, great stewardship,
and low costs. The fund glues together its foreign-
and domestic-stock strategies, both of which have
strong long-term performance. It makes for a
dependable core holding.
Gold-rated
Oakmark Global
OAKGX
is for inves-
tors willing to accept a little more risk for a little more
return potential than Dodge
&
Cox Global Stock.
Oakmark has just
40
holdings to Dodge
&
Cox’s
97
and has
39%
of assets in its top
10
names to
23%
for Dodge. Clyde McGregor and Rob Taylor seek out
companies trading at a steep discounts to their
intrinsic values, but in their case, this leads to an
unusual mix of value and growth stocks. This fund
is more middling on the Price and Parent points,
but it boasts strong performance and excellent manage-
ment to make it worthy of Gold.
Artisan Global Value
ARTGX
has great managers,
a sound strategy, and good performance to boot.
So, what makes it a Silver? Fees. The fund charges
1
.
50%
compared with
1
.
16%
for Oakmark Global
and
0
.
65%
for Dodge
&
Cox Global Stock. If Artisan
only would offer shareholders a fair deal, this fund
likely would merit a Gold rating.
Artisan Interna-
tional Value
ARTKX
has the same managers and a
1
.
17%
expense ratio, and we rate that one Gold.
Unfortunately, it’s closed to new investors.
Tweedy, Browne Value
TWEBX
is also held back by
expenses. This Silver-rated fund charges
1
.
40%
but
has stable management and otherwise good steward-
ship. The firm has long-held ties with Warren Buffett,
and it practices a more diffuse version of Buffett’s
strategy. The managers are patient investors who will
pay a fair price for a good company with a good
moat. In addition, performance has been spottier than
the funds above. The fund’s five-year returns are
strong, while
10
- and
15
-year returns are not. Part of
that is due to the fact that the fund has shifted
from a mostly U.S. fund with a slug of foreign names
to a world-stock fund with equal amounts in U.S.
and foreign names. Even excluding that factor, though,
it’s a strategy that has enough ups and downs that it
requires a lot of patience from shareholders.
Perkins Global Value
JGVAX
is rated Bronze
because it has good ingredients but is much less
proven than the above funds. It had been Janus
Global Value, but then in
2010
, manager Greg Kolb
moved from Janus to Perkins, where his value
leanings are a better fit. Kolb has been a comanager
on the fund since
2005
and a lead since
2009
.
In sum, we don’t have a lot of data on the fund in its
current guise, though it is promising. To boost this
fund, Perkins added two foreign analysts alongside its
16
-member domestic team.
Janus Global Select
JORNX
is rated Neutral
because it is even less proven than Perkins Global
Value. George Maris has been the manager on
the fund for less than a year. In the past, Maris has
run rather diffuse portfolios, so it will be inter-
esting to see how he adapts to running a focused port-
folio and how he meshes with the Janus culture.
Invesco Global Core Equity
AWSAX
earns a Nega-
tive rating for being consistently weak. It has under-
performed in each of the four full calendar years since
the management team took over in
2008
. The fund
follows a quantitative value strategy that has fallen
for too many value traps over the years such as
Nokia
NOK
and
Best Buy
BBY
. It’s a real challenge
for quant value strategies because they are looking
at past data and trying to find cheap stocks. If the
Best Buys and Nokias of the world really could return
to past profit levels, they would be screaming buys.
Only they aren’t.
œ
Breaking Down Our World-Stock
Fund Ratings
Tracking Morningstar Analyst Ratings
|
Russel Kinnel
What Are Morningstar
Analyst Ratings?
Our ratings are chosen for long-
term success. Analysts assess
a fund’s competitive advantages
by analyzing people, process,
parent, performance, and price.
They do rigorous analysis and
then submit their ratings to a
committee that vets their work
for thoroughness and consistency.
