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M*: A Downgrade For This Foreign-Stock Fund: (TBGVX)

FYI: We're lowering our Analyst Rating to Bronze for Tweedy, Browne Global Value, due to relatively high expenses and some management uncertainty on the horizon.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=823302

Lipper Snapshot TBGVX:
http://www.marketwatch.com/investing/fund/tbgvx

TBGVX Ranks #13 In The (FLCV) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/foreign-large-value/tweedy-browne-global-value-fund/tbgvx

Comments

  • edited August 2017
    It's an interesting question whether a 72 year old manager faces imminent retirement in 2017. People are living longer and can work a lot longer than they used to especially if they're wealthy and have access to the best doctors and treatments. It strikes me as a bit ageist to assume this manager, Will Browne, is leaving soon if he hasn't said that he is. He may love the work and could still be good at it for quite a while. There is an element of uncertainty to it but then he has younger comanagers helping him out. So I'm not sure this downgrade is justified on those grounds. The fees and currency issues may be more relevant.
  • TBHDX has also lagged big time.

    What I find a typically M* in all of this (aside from the fact that my wife owns both TWEBX and TBHDX) is that yet again M* is all over the map.

    The facts are: (1) Tweedy is a very stable organization (they tout the fact all the time...); (2) Tweedy's hedging policy is well-established; (3) Tweedy freely admits upfront that they will have extended periods of under-performance, that they make their money in declining markets (its in every shareholder letter, its been noted on every shareholder call I've been on). So, Tweedy hasn't done much differently in the near or extended past. They also tout their deep bench of analysts, and continuity of analytic and portfolio staff (the departure of the analysts M* noted was transparently covered in Tweedy's shareholder communications). I suspect that AMG layer has something to do with that.

    On the M* side of the equation: (1) M* has had periods when they raved about Tweedy as a manager; (2) M* has typically favored the value orientation to portfolio management.

    In spite of this, M* now either sees the light, or decides to turn a a shoulder on Tweedy?

    Its not like TWEBX is the only fund I'd ever own in that particular space or is right for every investor. But if you're a conservative deep-value person, these are reasonable choices (the new-ish TBHDX, with its specialized mandate and deviation from a deep-value philosophy is another matter, however).
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