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I’m adding three funds to the Morningstar
500
.
Causeway Emerging Markets
CEMVX
, with a Morn-
ingstar Analyst Rating of Bronze, is showing that
quantitative approaches canwork just aswell in emerging
markets as in developed markets. Management
believes the quantitative approach enables it to cast a
wider net than would otherwise be possible using
analysts for fundamental research. It combines value
and momentum models along with top-down models
and risk-management models to build the portfolio. The
resulting portfolio has about
100
stocks and has a
distinct value tilt.
The top-down and risk-management models are crucial
because big macroeconomic and currency move-
ments have overwhelmed individual company funda-
mentals for much of the past decade. In fact, the
results have been pretty strong in a variety of markets.
The fund is run by Causeway’s quantitative team, so
it does not have the same management as
Causeway
International Value
CIVVX
. See Page
5
for details.
Two Multialternative Funds Join
Last month, we wrote about the landscape in the
world of multialternative funds. This month, I’m
adding two of the funds profiled in that article. Both
are available in most No Transaction Fee platforms.
Natixis ASG Global Alternatives
GAFAX
aims to track
a hedge fund index by using futures contracts to
mimic what hedge funds are doing. It does so using a
targeted
8%
volatility level and using a stop-loss rule
to curb the downside. By trying to replicate hedge fund
performance rather than actually running a hedge-
fund-like strategy, the fund can save some money on
investment professionals and pricey subadvisors.
Thus, the fund’s fees are cheaper than most in an admit-
tedly pricey group. See the facing page for more.
Litman Gregory Masters Alternative Strategies
MASNX
is a fairly bold alternative fund with a well-known
lineup. The Bronze-rated fund is split between a
bond side and a stock side. The bond side includes a
global unconstrained-bond strategy run by Loomis
Sayles and an aggressive mortgage sleeve run by Double-
Line Capital. The other half of the fund is run by First
Pacific Advisors, Water Island Capital (merger arbitrage),
and Passport Capital (long-short). See Page
6
for details.
Three Go Out
Artisan Small Cap Value
ARTVX
is being merged into
Artisan Mid Cap Value
ARTQX
, so it’s going out.
Oppenheimer Gold & Special Minerals
OPGSX
has
been dropped from coverage.
Finally, Neutral-rated
Appleseed
APPLX
has less than
$200
million and is a logical candidate to drop.
K
What is Morningstar
FundInvestor
500
?
The Morningstar FundInvestor
500
features the industry’s
best and most notable funds.
Use the list to get new in-
vestment ideas and track the
funds you already own.
FundInvestor
subscribers have
access to one-page monthly
reports on all 500 funds on
mfi.morningstar.com. Just
type in the name or ticker of
the fund in the search box.
Alternative Funds Make a Splash
Changes to the 500
|
Russel Kinnel
Summary of Changes
Add
Drop
Causeway Emerging Markets
Appleseed
Litman Gregory Masters Alt Strats
Artisan Small Cap Value
Natixis ASG Global Alternatives
Oppenheimer Gold & Special Min
Rating Change (Upgrade)
From
To
Baird Core Plus Bond
´ •
Vanguard Strategic Equity
‰ ´
Wasatch Core Growth
• Œ
Rating Change (Downgrades)
From
To
Amana Growth
• ´
Amana Income
• ´
Artisan Small Cap Value
´ ‰
Longleaf Partners
• ‰
Longleaf Partners Small-Cap
Œ •
Sequoia
Œ ´
Virtus Emerging Markets Opportunities
• ´
Virtus Foreign Opportunities
• ´
Rating Change (Under Review)
From
To
Manning & Napier Pro-Blend Cnsrv Term
´ ˆ
Manning & Napier Pro-Blend Extnd Term
´ ˆ
Manning & Napier Pro-Blend Max Term
´ ˆ
New
Ratings
To
Baird Aggregate Bond
•
Causeway Emerging Markets
´
FMI International
•
T. Rowe Price Global Technology
´
T. Rowe Price Health Sciences
‰