Compared with the six Gurus we added before, the nine funds we started to follow invest more in Asia, Australia and emerging market. They should provide a good starting point for generating value ideas in Asia and Australia.
These are the funds and their performances:
|03/31/2013||Manager||Inception Year||Total Assets ($Million)||Expense Ratio (%)||1 Y||3 Y||5 Y||10 Y||Since Inception|
|Virtus Emerging Markets Opportunities Fund (HEMZX)||Rajiv Jain||1999||1416.91||1.62||7.99||13.34||6.47||18.30||11.60|
|Matthews Pacific Tiger Fund Investor Class (MAPTX)||Richard Gao, Sharat Shroff, Mark Headley||1994||7300||1.11||12.12||9.53||7.67||18.95||9.22|
|Matthews Japan Fund Investor Class (MJFOX)||Kenichi Amaki, Taizo Ishida||1998||151.38||1.21||15.03||9.62||2.37||8.03||4.66|
|Hennessy Japan Fund Investor Class (HJPNX)||Yu Shimizu, Masakazu Takeda||2003||23||2.04||14.86||12.11||4.50||-||7.16|
|Hennessy Japan Small Cap Fund Investor Class (HJPSX)||Hidehiro Moriya, Tadahiro Fujimura||2007||16||2.34||19.17||11.95||5.65||-||6.33|
|T. Rowe Price Japan Fund (PRJPX)||M. Campbell Gunn||1991||218.2||1.14||13.21||7.00||-0.40||7.40||1.08|
|Causeway International Value Fund Investor Class (CIVVX)|| Sarah Ketterer,|
|Wasatch International Growth Fund (WAIGX)||Roger Edgley||2002||923.7||1.57||25.14||18.42||9.04||15.47||12.73|
|Morgan Stanley Institutional Fund Global Franchise Portfolio Class I (MSFAX)|| William Lock,|
These are the details of the Global Funds. GuruFocus Global Membership is required to gain access to Global Fund portfolios and value screeners for global stocks.
Virtus Emerging Markets Opportunities Fund
Virtus Emerging Markets Opportunities Fund Class A (HEMZX) was established on 8/11/1999. The total net assets by class are approximately $1.417 billion and the annual turnover (as of 12/31/2012) is 29%. The fund seeks capital appreciation by investing in well-established companies which offer investors exposure to emerging market economies. Within this fund, the top two sectors are Consumer Staples (40.02%) and Financials (34.35%). The top three geographic allocations are India (26.87%), United Kingdom (17.03%), and Mexico (14.99%).
Virtus Emerging Markets Opportunities Fund is managed by Rajiv Jain since 5/18/2006.
“The securities selected for inclusion in the fund are, in the opinion of the subadviser, well-managed businesses with consistent operating histories and financial performance that have favorable long-term economic prospects, and in most cases, generate free cash flow. Over full market cycles, the investment style is designed with the dual objectives of capturing part of the up market cycles and protecting principal in down market cycles.”
Matthews Pacific Tiger Fund
Matthews Pacific Tiger Fund Investor Class (MAPTX) was established on 9/12/1994. The net assets are $7.3 billion (as of 3/31/2013) and the portfolio turnover rate is 6.53%. The fund seeks long-term capital appreciation by investing at least 80% of its total net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia Ex Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. Within this fund, the top four sectors are Financials (31.4%), Consumer Staples (15.1%), Information Technology (13.8%), and Consumer Discretionary (11.3%). The top four geographic allocations are China/Hong Kong (27.0%), India (15.8%), South Korea (15.0%), and Indonesia (10.4%).
Matthews Pacific Tiger Fund is managed by Richard H. Gao (since 1/4/2006), Sharat Shroff, CFA (since 1/1/2008), and Mark Headley (since 9/1/1996).
Matthews employs a bottom-up, fundamental investment philosophy with a focus on long-term investment performance.
(1) Active management
“We believe many of the regions’ widely used equity indices are backward looking and are not representative of the industries and companies that will be successful in the future. With respect to the region’s debt indices, we believe they are representative of the most indebted countries as opposed to the most creditworthy.”
(2) Long-term focus on Asia
“We believe a long-term approach is the most effective way to capitalize on Asia’s evolution.”
(3) Bottom-up research
“We employ a fundamental, bottom-up investment process. For equities, we seek to identify companies with sustainable long-term growth prospects, strong business models, quality management teams and reasonable valuations.”
(4) Defining Asia investment strategies
“We strive to provide investors a range of Asia strategies across the risk-reward spectrum and launch new strategies when there are compelling investment opportunities in the region.”
Matthews Japan Fund
Matthews Japan Fund Investor Class (MJFOX) was established on 12/31/1998. The total net assets are $151.38 million. The Fund seeks long-term capital appreciation by investing at least 80% of its total net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Japan. Within this fund, the top four sectors are Financials (23.3%), Consumer Discretionary (21.7%), Industrials (18.5%), and Information Technology (14.2%).
Matthews Japan Fund is managed by Kenichi Amaki (since 4/30/2010) and Taizo Ishida (since 9/29/2006).
Hennessy Japan Fund
Hennessy Japan Fund Investor Class (HJPNX) was established on 10/31/2003. The total fund assets are $23 million and the portfolio turnover is 2%. The Fund seeks long-term capital appreciation by investing at least 80% of its net assets in equity securities of Japanese companies. Within this fund, the top two sectors are Industrials (28.0%) and Consumer Discretionary (23.1%).
Hennessy Japan Fund is managed by Yu Shimizu (since 1/31/2012) and Masakazu Takeda (since 11/1/2006).
“Hennessy employs a consistent and repeatable investment process, combining time-tested, purely quantitative stock selection formulas with a highly disciplined, team-managed approach. Hennessy Japan Fund invests in stocks which its portfolio managers believe to be good businesses with exceptional management and which are trading at an attractive price. Individual stock selection is based on rigorous, on-site research and focuses on factors such as market growth potential, management quality, earnings quality and balance sheet strength. The Fund seeks arbitrage opportunities between a company’s fundamental value and its market price. The portfolio selects just the managers' best ideas and has a concentrated number of holdings.”
Hennessy Japan Small Cap Fund
Hennessy Japan Small Cap Fund Investor Class (HJPSX) was established on 8/31/2007. The total net assets are $16 million and the portfolio turnover is 49%. The Fund seeks long-term capital appreciation by normally investing at least 80% of its net assets in equity securities of smaller Japanese companies, defined as those with market capitalizations in the bottom 15% of all Japanese companies. Within this fund, the top three sectors are Industrials (37.1%), Information Technology (23.0%), and Consumer Discretionary (18.7%).
Hennessy Japan Small Cap Fund is managed by Hidehiro Moriya (since 7/9/2012) and Tadahiro Fujimura (since 8/31/2007).
T. Rowe Price Japan Fund
T. Rowe Price Japan Fund (PRJPX) was established on 12/30/1991. The net assets are $218.2 million and the turnover rate as of 10/31/2012 is 55.1%. The Fund seeks long-term growth of capital through investments in common stocks of companies located (or with primary operations) in Japan. Within this fund, the top three sectors are Automobiles and Transportation Equipment (15.2%), Electric Appliances and Precision Instruments (11.8%), and It & Services & Others (10.5%).
T. Rowe Price Japan Fund is managed by M. Campbell Gunn since 1/1/2003.
“Security selection reflects a growth style. The fund relies on a global team of investment analysts dedicated to in-depth fundamental research in an effort to identify companies capable of achieving and sustaining above-average, long-term earnings growth. We seek to purchase stocks of such companies at reasonable prices in relation to present or anticipated earnings, cash flow, or book value.
In selecting investments, the fund generally favors companies with one or more of the following characteristics:
•leading or improving market position;
•attractive business niche;
•attractive or improving franchise or industry position;
•stable or improving earnings and/or cash flow; and
•sound or improving balance sheet”
Causeway International Value Fund
Causeway International Value Fund Investor Class (CIVVX) was established on 10/26/2001. The total share class assets are $374.8 million and the turnover rate as of 9/30/2012 is 21%. The Fund seeks long-term growth of capital and income by investing companies which generally have market capitalizations greater than $750 million. Within this fund, the top three sectors are Industrials (18.1%), Financials (18.1%) and Materials (13.8%). The top three geographic allocations are United Kingdom (22.6%), Germany (14.7%) and Japan (13.2%).
Causeway International Value Fund is managed by Conor Muldoon (since 12/31/2010), Jonathan Eng (since 1/30/2006), Kevin Durkin (since 1/30/2006), Sarah Ketterer (since 10/26/2001), Harry Hartford (since 10/26/2001), and James Doyle (since 10/26/2001).
“The investment process is comprised of three stages: screening and initial analysis, fundamental research, and portfolio construction.
Our international investment philosophy is value-driven with a fundamentally based, bottom-up approach to stock selection. We believe that companies derive their value from the contribution of yield and profitable re-investment back into the company.
We believe that we can outperform our clients’ various benchmarks by using fundamental and quantitative strategies with an emphasis on identifying undervaluation. We seek to achieve superior returns over full-market cycles while generally taking benchmark levels of risk – or less.”
Wasatch International Growth Fund
Wasatch International Growth Fund (WAIGX) was established on 6/28/2002. The net assets are $923.7 million and the turnover rate as of 3/31/2013 is 48%. The Fund seeks long-term growth of capital by investing primarily in foreign growth companies domiciled in developed and emerging markets. Within this fund, the top three sectors are Consumer Discretionary (22.5%), Consumer Staples (14.3%), and Information Technology (13.9%). The top two geographic allocations are United Kingdom (17.8%) and Japan (16.5%).
Wasatch International Growth Fund is managed by Roger Edgley since 1/31/2006.
“Portfolio Manager Roger Edgley is most interested in finding companies with following characteristics: Potential for significant and sustained revenue and earnings growth; experienced, proven management team; high return on capital; sustainable competitive advantage; market leadership and/or growing market share; ability to capitalize on favorable long-term trends; strong financial health and controls; reasonable use of debt; attractive valuation.”
“We use a bottom-up process of fundamental analysis to look for individual companies that we believe are high-quality, stable, and have the potential to grow earnings for long periods of time. To determine that a company has these characteristics, Roger takes the following approach:
Using financial databases, he screens for companies demonstrating high-quality growth.
(2) Deep Due Diligence
We use a thorough and collaborative process to understand the companies in which we invest. We study the company, its competitors, and its industry. We talk with management to verify the quality of the leadership and gain deeper insight for the company’s prospects and risks. We call competitors, suppliers, and customers to make sure we have a complete picture of the landscape. Meanwhile, we are constantly talking with other Wasatch portfolio managers and analysts in order to leverage the knowledge, perspective, and insight of the broader Wasatch team in every investment decision.
(3) Earnings Models
We build proprietary earnings models in order to analyze a company’s key growth drivers.
We consider a variety of appropriate valuation metrics (e.g. Price to Earnings, Enterprise Value to EBITDA, Price to Book, etc.) to assess the potential return and the risk/reward trade-off of each stock.”
Morgan Stanley Institutional Fund Global Franchise Portfolio
Morgan Stanley Institutional Fund Global Franchise Portfolio Class I (MSFAX) was established on 11/28/2001. The net assets are $488.09 million and the turnover rate as of 12/31/2012 is 34%. The fund seeks long-term capital appreciation by investing primarily in equity securities of issuers located throughout the world that they believe have, among other things, resilient business franchises and growth potential. Within this fund, the top two sectors are Consumer Staples (70.07%) and Information Technology (15.79%). The top two geographic allocations are United Kingdom (36.30%) and United States (35.06%).
Morgan Stanley Institutional Fund Global Franchise Portfolio is managed by Marcus Watson (since 1/29/2013), Bruno Paulson (since 6/30/2009), Vladimir Demine (since 6/30/2009), Christian Derold (since 6/15/2009), William Lock (since 6/15/2009), Peter Wright (since 6/15/2009) and John Goodacre (since 6/15/2009).
“The team follows a distinct and disciplined investment process based on bottom-up stock selection, with sector, industry and stock weightings driven by the team’s assessment of each stock’s quality and valuation characteristics.
(1) Investable universe:
Companies are screened based on financial metrics that the team believes are associated with strong franchise businesses. The key financial characteristic of these companies is that they enjoy sustainable, high unlevered return on invested capital (ROIC), which is generated by a combination of recurring revenues, high gross margins and low capital intensity. This combination helps support strong free cash flow generation, which, crucially, must be either reinvested at similarly high returns or distributed to shareholders.
(2) Security selection:
The team looks for high-quality businesses with the following characteristics: difficult-to-duplicate intangible assets that protect the durability of the franchise; a sustainable, high ROIC on an unlevered basis; high gross margins and low capital intensity; a reliably recurring revenue stream; and financial strength and capable management.
The team monitors signs of franchise abuse, including failing to re-invest capital in high ROIC businesses, preventing compounding by retaining excessive cash and earnings-per-share targets having precedence over ROIC, which rewards short-sighted behavior.”
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