FMI International (FMIJX) - fact or fiction???

mcmarasco

I asked this question on the M* discussion board as well, but I'm also interested to hear what the members on this board have to say!!!

Hi all, I am looking for a LC international value/blend fund with little or no EM and reasonable volatility and down-side protection. I've read some good things on this fund and it seems to a very good MF and fits my criteria.

The hedging is a little concern of mine, but after reading the Q4 commentary, the mgmnt team seems to be willing to adjust when necessary. So I feel a little better about that. Any thoughts on this item, in particular?

It will be in a taxable account and it will be a long-term investment.

I've owned FMIHX for several years and FMI is a nice shop, but as has been pointed out FMIJX is their first endeavor into the foriegn arena, with GREAT 3-year results!

Is the success a result of recent good times or stock picking prowess or something else?? I know that this might not be a fair or reasonable question but i'm asking it anyway.

Any thoughts, ideas or opinions a very welcome!!!!



Thank you,

Matt

jlev

I hold it and chose it because I like their committed value approach. I think their hedging as I understand it is to mainly in the currency realm to reduce volatility and have the fund's growth primarily reflect the absolute change in stock prices rather than that leveraged by additional volatility in currency values

Ted

Reply to @jlev: FMIJX is a keeper !
Regards,
Ted

ron

I prefer a fund with a little more history, especially before this run since 2011. But it looks ok.

cman

Shaping up to be what would be called a "group think" fund in the future.

Personally, I don't think anyone should be using this fund for a core portfolio or for that matter any fund that hasn't gone through 2008 and 2009. Unless one actively monitors their portfolio and can be nimble about getting out before a fund can do great harm in a scenario it hasn't been proven yet. This is not to say, it won't do well, just saying the criterion to select this fund is based too much on recent performance while we have a nice recent period to test a fund over a cycle.

mcmarasco

Thanks everyone for your thoughts, truly appreciated!!

ron/cman, I do agree with your concern about the youth of this fund, but if i look at funds with 5+ years of history, i would miss out on a LOT of good MF's, regardless of the category. The FMI family's track record is fairly solid and their funds hold-up well in down cycles. So this gives me "hope/confidence" that FMIJX will follow suit!!

cman, when use say "CORE" what percentage are you talking about? I am looking to allocate 6% - 10% to this fund.

Does anybody have any thoughts or concerns regarding FMI's first venture into the international arena?? This concerns me much more than the youth of FMIJX.


Continue profitable investing!!

Matt

mrdarcey

Reply to @mcmarasco: FWIW, from what I've read about FMIJX, the focus is on large, quality, mostly European and Canadian names, and U.S. firms that do foreign business. Those sorts of firms probably present lower barriers to evaluation than, say, if the fund focused on local growthier companies. Don't know, but I also wonder if it somewhat lowers the diversification value, along with the hedging, because these are the sort of global names already held by many sorts of quality U.S. funds, including FMIHX.

That being said, the metrics people tend to look at here -- R2, Martin, Sortino, Sharpe, Beta/SD, Turnover% -- have all been outstanding over the past 3 years.

cman

Reply to @mcmarasco: By "core", I mean a holding that plays the essential part of your investment strategy. For example, a buy and hold portfolio might have a percentage allocation to an asset class like international developed markets independent of a fund, and find a fund (or two) to fill that allocation. Typically, you use a fund that has a good track record because you don't want that fund to disintegrate and screw up your portfolio. You may just have core holdings in a portfolio or you may also have some satellite funds in addition that fill a niche or used tactically to get exposure to some asset class or take chances on high flying funds with a small allocation. Just saying that FMUJX does not have sufficient track record to be considered for a core holding serving that purpose.

mcmarasco

Thanks again!!

mrdarcey, great points and something to consider and investigate further!!

cman, thanks for the def.!! Your explanation makes a lot of sense and I get it. I certainly do not want a "core" allocation/holding blow up my prtfolio; I will have to reevaluate! Do you have a percentage of an asset class that you consider "core". Such as 20%, 25%, 15%???

Matt