548 / 772
18
Don’t give up on your global value manager. Value
has lagged growth lately, and that means that
most value investors in the world-stock Morningstar
Category have rather-pedestrian records of late.
But I wouldn’t worry too much about a short-term
slump, as growth and value are always taking turns
at the head of the tables.
Let’s look at six of our world-stock Morningstar
Medalists with a value tilt.
Artisan Global Value
ARTGX
has the best year-to-
date performance of the six funds presented here,
with returns about flat and just below the category
average. This fund has a Morningstar Analyst Rating of
Silver and is closed to new investors, and I would
certainly hold on here. The fund has found some
of the better financials and tech stocks while largely
avoiding energy and materials disasters. Our first
rating on the fund was a Silver in June
14
,
2012
. Since
that time, the fund has gained a cumulative
59%
compared with
47%
for the average world-stock fund.
Dodge & Cox Global Stock
DODWX
is down
4%
for
the year to date owing to big losses in top-
20
holdings
HP
HPQ
,
Time Warner
TWX
, and
EMC
EMC
, as well
as its high emerging-markets weighting. The fund’s
strategy often features buying solid businesses that
are in a slump with the idea that merely returning
to past profitability levels will be good for a nice pop.
However, these examples illustrate that it doesn’t
always work or, at least, there are bumps along the
way. This fund had a Gold rating when we launched
the ratings in November
2011
. Since then, the fund is
up
64%
versus
47%
for the category.
Franklin Mutual Global Discovery
TEDIX
is all about
playing defense, so it’s a little disappointing that
the fund is in the red for the year, though negative
1%
is hardly a disaster. The fund looks for anything that’s
cheap including distressed securities, merger-arbi-
trage plays, and just plain-old low valuation stocks. A
smattering of holdings in energy and basic materials
have stung. The fund has been rated Silver since our
ratings launch in November
2011
. It has a
51%
cumulative return versus
47%
for the category, and
that’s really not bad for a lower-risk fund.
Oakmark Global
OAKGX
is about flat for the year,
which puts it in the third quartile for the year to date.
Clyde McGregor and Rob Taylor have had some
nice winners like
Alphabet
GOOG
(nee Google) and
Allianz
ALV
but also some laggards like
Oracle
ORCL
and
Union Pacific
UNP
. The fund had a Gold rating on
the Nov.
15
,
2011
, launch of our ratings. It boasts a
64%
cumulative return versus
47%
for the world-stock
category since then. The fund is now limited to
those who invest directly through Vanguard, so it is
open but in a less convenient way.
Tweedy, Browne Value
TWEBX
is also a bit like
Dodge
&
Cox in its application of value. We first issued
a Silver rating on the fund on Jan.
13
,
2012
. The
fund is down about
2%
for the year to date as winners
like
Heineken
HEIO
have been offset by laggards like
Royal Dutch Shell
RDS
.A and
Standard Chartered
STAN
. The fund tends to be fairly defensive with its
cash stake and wary of price risk. The fund is up
about
44%
since we gave it that Silver rating, and it
lags the world-stock average of
47%
.
Tweedy, Browne Worldwide High Dividend Yield
Value
TBHDX
is also rated Silver. It has lagged its
sibling over the short and long haul partly because it
doesn’t hedge currency exposure. The fund’s yield
mandate has also given it a heavier foreign-equity
weighting (
70%
) compared with its sibling’s
50%
weighting, and that has also held back returns. It
received a Silver rating on Jan.
13
,
2012
, but it has
lagged by a wide margin. It has returned
26%
versus
47%
for the peer group.
K
World Value Funds May Be Due
for a Rebound
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.