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Q&A With David Herro, Manager, Oakmark International Fund
FYI: As eurozone recession fears mount, Europe-based firms with a global footprint are becoming attractively valued; meanwhile bargains are harder to find in Japan and the emerging markets, says the Oakmark International manager. Regards, Ted http://www.morningstar.com/Cover/videoCenter.aspx?id=674284
Oakex has a large stake in Europe where it is in or near recession. Smaller caps companies don't have sale in other part of the world where their economy is doing better. If you have a long term perspective, it will likely work out okay.
I personally like Matthews Asia Small Companies fund better where the economy is growing. The only downside is the region focus, but it is one of the more aggressive offering from Matthews Asia.
I actually prefer MEASX over MSMLX, although there's certainly nothing wrong with it. I get most of my Asia small cap emerging markets exposure from GPEOX and GPIOX, so I appreciate the frontier market investments of MEASX as well as some exposure to larger companies.
In terms of Europe, I think the Oakmark fund has done very well most years except 2007 was painful and this year is painful as well. I don't own the fund but that wouldn't make me lose faith in it either. I own OBIOX and its not having a great year either but I like the approach the fund takes and I appreciated David's write-up. I also think OSMAX has a long and great record and I didn't own it previously because I won't pay a load, but I discovered recently that Fidelity has share classes without the load and I'm actively considering whether to add it to my portfolio as soon as Draghi is able to do more than simply talk the EUR down. If the Germans get onboard with stimulating the economy then I think we could see a big rally for Europe generally but hopefully even more so for the small cap fare that depend more on the local economy.
Comments
I personally like Matthews Asia Small Companies fund better where the economy is growing. The only downside is the region focus, but it is one of the more aggressive offering from Matthews Asia.