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Several Morningstar articles had mentioned the use of quantitative research for DODEX.
"Dodge & Cox isn’t normally associated with quantitative work, but quant analysis can serve fundamental strategies just as well as tactical trading strategies. Robert Turley, who holds a doctorate in business economics, has had a big impact on the firm’s quantitative and risk management work. He’s one of six named managers on Dodge & Cox Emerging Markets Stock (DODEX). This fund has made quantitative research more central to the process than it is at other funds." Link
"Unlike the firm’s other offerings, however, this one relies on a quantitative model—developed by committee member Robert Turley—to find attractive stocks. The firm’s vaunted analyst team doesn’t dive deeply into the model’s recommendations; it simply checks if those stocks meet the team’s expectations for valuation, management, and business prospects." Link
Dodge & Cox communications emphasize the use of fundamental research for DODEX. I did not find quantitative research explicitly mentioned.
"Dodge & Cox relies on fundamental research to select investments for the Fund’s portfolio, supplemented by financial screening models that help identify companies from within the Fund’s investment universe for further consideration by research analysts." Summary Prospectus
"The Fund is constructed based on Dodge & Cox’s strict valuation discipline and fundamental approach to stock selection, with a portfolio built on the expertise of our global industry analysts. In the years we have spent investing in emerging market companies for other Dodge & Cox mutual funds, we have built tools to enhance our analysts’ ability to identify risks and opportunities in emerging markets." Link
Thanks. Very interesting info. Based on that, I actually wouldn’t recommend DODEX as there are cheaper quantitative emerging market ETFs run by more experienced managers at DFA and Avantis. DFAE is one, AVES is another as well as AVEM and DFEV. I would say the value ETFs are probably more like DODEX.
@Observant1 and @LewisBraham thanks very much for your inputs here. I wasn’t aware that quantitative modeling was the basis for stock selection for DODEX. Also as you say a much larger portfolio than their other stock funds. For emerging markets I prefer to go with an active manager that utilizes fundamental analysis and that is focused on valuation. I think I’ll dig a bit more into Seafarer and Rondure as options. Both have done quite well in risk adjusted performance. Please let me know if you have inputs on other funds to consider in this space.
Professor Snowball mentioned several EM stock funds in his recent Investor's Guide to 2023 article. Seafarer Overseas Value (SIVLX) seems to be a good choice in this category. Link
Appears to me that SILVX is available at Schwab and TDA with a $25K minimum, but that the Investor shares (SFVLX) require $1M minimum, which may mean not available. Truly bizarre. I rather like the notion of EM value, but those minima are beyond what I want to spend.
Appears to me that SILVX is available at Schwab and TDA with a $25K minimum, but that the Investor shares (SFVLX) require $1M minimum, which may mean not available. Truly bizarre. I rather like the notion of EM value, but those minima are beyond what I want to spend.
@BenWP I think you meant SIVLX and not SILVX. The former is Institutional Class with a $25,000 minimum. SFVLX is Investor Class and it is not available for purchase at Schwab.
Thanks, @Mona. I could invest directly with Seafarer but I dislike the extra record keeping. The new Matthews ETF, MEM, and the Cambria EYLD have my attention also.
I re-established an EM fund early in 2022. It appears that I was a bit early. Which means it was crushed. PDEZX...which I added a bit to last week. Over the next 2 years I'll either get crushed again, or go up 90%.
@Observant1. Thanks for highlighting David’s article. That’s a wonderful resource of ideas . Can’t believe I missed that. Ben, Mona and Press thanks for sharing your ideas. Both Seafarer funds are on my list. I agree that the value one is quite intriguing. Hell it was positive for 22…
I took the same EM ride as you @PRESSmUP. Mine was with ARTYX which trends identical to PDEZX. Very "growthy" with strangely was 45% in US... 25% in China. I made a mistake and towards the fall of 2022 to the loss moved that money to RNWOX. More value and I liked the managers focus on India instead of China.
Bottom line, you can have a very different experience with an EM fund depending on what you own. I don't need the nosebleed ups and downs of funds like PDEZX and ARTYX anymore. Give me EM funds like SFGIX or RNWOX anytime.
I just recently learned of EMXC, iShares MSCI EM ex-China ETF. There may be some interest there—no risk of PRC government “oversight” . A poster I follow on another message board who has been very bearish for a long time has turned bullish since last week, and is buying SC & EM funds, among others things (still bearing on FAANG and TSLA)…not sure that’s worth anything at all, but I did learn about EMXC from him.
I re-established an EM fund early in 2022. It appears that I was a bit early. Which means it was crushed. PDEZX...which I added a bit to last week. Over the next 2 years I'll either get crushed again, or go up 90%.
MEGMX and MEM are underweight China. M* has the country at 27% in the index, while the Matthews funds hold only 10%. As @Graust points out, one can avoid the country altogether.
In emerging markets--really any market--there are all sorts of country risks. If a fund doesn't invest in China or is light China, it will likely overweight India instead. With India, one of the big risks is an escalation with Pakistan, which has been ongoing for decades. India-Pakistan is viewed as one of the most likely regions for a nuclear war to occur. Of course, developed markets like our own are facing our own crises.
@LewisBraham: true about risk of clash between India and Pakistan. Comparing what I’ve read about the shenanigans that go on daily on the Kashmir border, these guys outdo what the two Koreas have done at their border since 1953. I have visited the DMZ in Korea, a truly bizarre and frightening place for a peace lover. How they have avoided another outright war is a puzzle.
These were just posted by Seafarer. Portfolio briefings on both the growth and income as well as the value funds. I always appreciate listening to Andrew Foster's briefings AND he has recently added Lydia So from Matthews as part of the team. She had a nice track record managing the Matthews Asia Small Companies fund so that's a strong addition. I'm also going to be digging more into the value fund based on David's recommendation https://www.seafarerfunds.com/video/2022/12/ogi-portfolio-briefing/ https://www.seafarerfunds.com/video/2022/12/ovl-portfolio-briefing/
yes, I won't touch China with my money until there is a sea change.
What I have in mind is civil rights, human rights. Free speech without Thought Police. Freedom of movement. (Occupied Palestine is also a place without Freedom of movement.) Freedom to assemble. Voting without pre-cooked elections. (But, as Churchill said: "the best argument against democracy is a 5-minute conversation with the average voter." My experience bears that out. But at least the system cannot be blamed for lazy, uninformed minds, here in the West.)
Comments
Several Morningstar articles had mentioned the use of quantitative research for DODEX.
"Dodge & Cox isn’t normally associated with quantitative work, but quant analysis can serve fundamental strategies just as well as tactical trading strategies. Robert Turley, who holds a doctorate in business economics, has had a big impact on the firm’s quantitative and risk management work. He’s one of six named managers on Dodge & Cox Emerging Markets Stock (DODEX). This fund has made quantitative research more central to the process than it is at other funds."
Link
"Unlike the firm’s other offerings, however, this one relies on a quantitative model—developed by committee member Robert Turley—to find attractive stocks. The firm’s vaunted analyst team doesn’t dive deeply into the model’s recommendations; it simply checks if those stocks meet the team’s expectations for valuation, management, and business prospects."
Link
Dodge & Cox communications emphasize the use of fundamental research for DODEX.
I did not find quantitative research explicitly mentioned.
"Dodge & Cox relies on fundamental research to select investments for the Fund’s portfolio, supplemented by financial screening models that help identify companies from within the Fund’s investment universe for further consideration by research analysts."
Summary Prospectus
"The Fund is constructed based on Dodge & Cox’s strict valuation discipline and fundamental approach to stock selection, with a portfolio built on the expertise of our global industry analysts. In the years we have spent investing in emerging market companies for other Dodge & Cox mutual funds, we have built tools to enhance our analysts’ ability to identify risks and opportunities in emerging markets."
Link
Professor Snowball mentioned several EM stock funds in his recent Investor's Guide to 2023 article.
Seafarer Overseas Value (SIVLX) seems to be a good choice in this category.
Link
Bottom line, you can have a very different experience with an EM fund depending on what you own. I don't need the nosebleed ups and downs of funds like PDEZX and ARTYX anymore. Give me EM funds like SFGIX or RNWOX anytime.
https://www.seafarerfunds.com/video/2022/12/ogi-portfolio-briefing/
https://www.seafarerfunds.com/video/2022/12/ovl-portfolio-briefing/