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World-Stock Funds Deserve More Attention Tracking Morningstar Analyst Ratings | Russel Kinnel

low-maintenance investments that don’t change much.

American Funds New Perspective ANWPX is growthier than its staid cousin, as it doesn’t have any dividend requirements. Thus, it tends to do a little better in years like 2013 , but really both American funds have diffuse portfolios and numerous managers. 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 with the likes of Oracle , Toyota Motor , and Credit Suisse . A focused port- folio means some rough years, like the 12% loss in 2011 , but this fund’s 10 -year return is the best in the group. Dodge & Cox Global Stock DODWX marries the firm’s best foreign and domestic ideas in an excellent portfolio. It isn’t exactly the same as you would get from owning Dodge & Cox Stock DODGX and Dodge & Cox International Stock DODFX , but it’s quite close. Dodge & Cox simply does an excellent job at patient value investing. And it does so at the cheapest price among the six with a cost of just 0 . 69% . Artisan Global Opportunities ARTRX has the stron- gest growth bias of our six funds. It’s run by Artisan’s growth team, which has managed Artisan Mid Cap ARTMX since 1997 . This fund’s lead manager is James Hamel, who also comanages Artisan Mid Cap and Artisan Small Cap ARTSX . Hamel has four comanagers, and Andy Stephens is the most senior investor of the group. Their approach is to look for companies with accelerating growth and clean balance sheets. Naturally, such attractive compa- nies 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 . œ

The world has gone global. Fund companies have torn down most regional breakdowns and instead have sector analysts who cross borders to get a better handle on their industries. Talk with a fund manager, and he or she will discuss the best com- panies with little regard to locale. 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 six 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 that leads them to well-known names like Schlumberger , Nestle , and Nike . Health care and tech account for the largest sectors, but the fund owns at least some- thing in most industries. 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, valua- tions, and quality. The fund boasts the lowest down- side capture ( 75% for 10 years) of the six world-stock funds highlighted here. American Funds Capital World Growth & Income CWGIX is a massive $90 billion fund, but it looks for some of the same things that Harding Loevner does. It, too, seeks blue chips at decent valuations. However, it has an income demand that leads it to own more value stocks. The fund aims for pre-expense income near that of the MSCI World Index. 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

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.