Was curious if anyone had done some due diligence on this fund. I've been running the numbers on MFO Premium and its risk adjusted performance is impressive over the 1, 3, and 5 year time frames. Also held up well in the October-December selloff. It looks like a winner to me. Top performer in International Growth category and available for no load at Schwab. Looking to add this fund as well as ARTJX as my new international holdings.
Comments
Derf
Thanks for the feedback. Yes MGGPX is an outstanding fund with even longer track record. Im also considering that one although I have little international expsure right now and am trying to address that gap in portfolio. One nice aspect to a global fund is they make the decision on where they see greatest opportunity. MGGPX also gives you some nice EM exposure. Risk is a bit higher. Great fund.
The reason Im looking at ARTJX is they recently had a manager change and the new manager-- Rezo Kanovich has an outstanding record of outperformance vs peers at OSMAX. Really interesting foreign fund focused on the small mid cap space. The one thing I still need to check is whether all the turnover in holdings was accomplished last year. They did have a sizeable cap gain last year. I like his bottom up approach.
Regards,
Ted
https://seekingalpha.com/article/4142997-retirement-dollar-cost-averaging-lump-sum-investment
In 2018, International Advantage did pass through the credit (7/8 of the fund's income was foreign-sourced), while Global Opportunity did not.
More curious is that virtually none of the dividends from Global Opportunity were qualified (just 0.61%), while virtually all of Int'l Advantage's were qualified (91.06%). I don't know if that was an anomaly or part of a pattern.
2018 Morgan Stanley tax guide:
https://www.morganstanley.com/im/publication/forms/tax/2018-tax-guide.pdf
https://mutualfundobserver.com/discuss/discussion/47736/m-should-you-keep-foreign-stocks-out-of-your-ira
A point that column missed was that the same argument could be applied to investing in separate domestic and foreign funds (where you'd get the foreign tax credit) vs. investing in a global fund where you wouldn't.
Here's a simple example to show what happens when the foreign tax is or isn't passed through:
Say your shares generate $150 in dividends. Say also that the fund owes foreign governments $50 in taxes. It has to pay the $50, leaving $100 in hard cash that it actually pays to you.
The fund could say on your 1099 that you got $100 in divs. No foreign tax credit. The fund simply paid those taxes as an operating expense and paid you what was left.
Alternatively, it could say on your 1099 that it distributed $150 in divs to you and paid the $50 in your name. You would owe taxes on that extra $50 that you only got on paper. Say that extra tax is $7.50 (15% x $50 in qual divs). Now the IRS will give you credit for the $50 "you" paid in foreign taxes (on paper). You would have a net gain of $50 (tax credit) minus $7.50 (extra tax) = $42.50.
It's really hard to tell how much that foreign credit is worth. The size of the credit can fluctuate wildly from year to year. My sense is that it's big enough to rise above the noise level, but it's still just a small factor to consider, not a game changer.
And rightly so.
Thx..
https://etfdb.com/etfdb-category/emerging-markets-equities/
Probably add more to EEM
For those who hold that markets are efficient (you can't beat the market), I've got too little in foreign stock, which represents only 57% of the world equity market.
For those who hold that multinational companies are all the same regardless of where based, I've got too much overseas.
I'm currently taking a course in comparative political economy. Our reading for this week, An Introduction to Varieties of Capitalism presents significantly different models of capitalism based on the interplay between national politics and the ways companies in different countries cooperate/compete/operate.
While it concedes that there is some movement toward convergence under globalization, it argues that there is still significant variation from country to country. The implication for our purposes is that multinationals are not all the same.
So, splitting the difference (with justification) between 0% and 57%. 1/3 seems like a reasonable allocation.