Wasatch vs Grandeur Peak

Art

Robert T. Gardiner and Blake H. Walker had a hand in at least 3 Wasatch funds before leaving to start Grandeur Peak.

The 4 funds were (WAEMX) (WAIOX) and (WAGOX). All with top 10% rankings in their category for 5 years.

I cannot purchase every fund that looks like it has potential, not enough money. The question is would you sell a Wasatch fund to buy a Grandeur Peak fund? I have (WAEMX), which is closed. The fund I would buy is (GPROX).

I know they are not the same category but I would bet there would be overlap. Besides I have the EM category covered elsewhere.

I am 5 years away from retiring and I am preparing my ROTH IRA for eventual transfer of at least some of my 401 and IRA. I am opening starting positions on funds that would replace funds I currently have elsewhere and may close before the transfer takes place. So far I have purchased small amounts in (ARTGX) and (VVPSX). (GPROX) would be added to ROTH.

Art

David_Snowball

Hi, Art.

I'd read our August 2013 story on Grandeur Peak's plans and the Global Reach profile before buying. The short version is that G.P. intends to have one "master" fund (Global Reach) that contains all of stocks, globally, that they find attractive. They then intend six other funds (including the newly-closed International and Global) to represent sub-sets of that universe. In trading WAEMX for GPROX, you'd be switching from a very focused subset of the global equity market to a very broad one. That might be in your best interest, but I'd at least be sure that I was comfortable with the change in focus first.

For what it's worth,

David

MarkM

Understandably, microcap has had a very nice run off the bottom. Before investing based on past returns or metrics, I'd investigate whether the fund has actually beaten its index over a market cycle or even from point of fund inception. And I wouldn't use Morningstar's index comparisons either without verifying appropriateness. That goes for Grandeur Peak as well.

OregonDan

Before adding to a toe-hold position in GPROX, I've been waiting to see the portfolio. Today I saw that GPROX has posted some general portfolio data, and specific holdings will be available Sept.30. Link:

http://www.grandeurpeakglobal.com/portfolio-detail.php?symbol=gprox

claimui

Based on the regional breakdown in OregonDan's link, I'm going to estimate that GPROX's portfolio is roughly 41.5% emerging (Asia ex Japan + Mexico + Africa/Mid East + Latin Am), 31.4% developed international, and 26.7% US.

So while GPROX is obviously broader than WAEMX, it is also more heavily tilted towards emerging markets than you might expect from a "global" fund.

Investor

Reply to @claimui: Asia ex Japan is not all Emerging markets. Mexico is counted in Lat. America so you are double counting it.

Art

Reply to @OregonDan:

I am buying that opening position today in (GPROX). While I have a even split with equities domestic/International in my portfolio I am heavy EM with (MAPTX) (SFGIX) (ODMAX) (WAEMX) and now (GPROX).

This is looking long term especially in my ROTH. At this point I do not need this fund. When retired this will be my Global small cap paired with (ARTGX).

Art

BobC

I agree with David on this. Swapping WAEMX for GPROX is really apples to kiwi, not much similarity at all. Frankly, if you want REAL em exposure, you might look at WAFMX. Laura Geritz' newish fund owns the real small cap em companies. Yes, more risk. But this could be where the big gainers will be in the next few years, too. She is one of the few true management stars in the em arena. This fund is not for everyone, and its expenses will surely choke index investors, but I own it in my 401k just to have some exposure to the markets of the future.

Art

Reply to @BobC:

It was only a swap in the sense that proceeds from the sale of one would buy the other.

Having 3 other EM funds at 15% of total portfolio, selling a 4th EM fund for a Global Fund with some EM exposure was OK with me. While I have 3 EM funds each is in a different account including ROTH,IRA and 401.

I am trying to position my ROTH with funds that I believe will be good funds for the next few years and may close. The purchase of (GPROX) will be in my ROTH. I will soon start transferring IRA to ROTH while there is still earned income and before the tax rules change.

Art

OregonDan

Laura Geritz' WAFMX is indeed interesting; it's more than (less than?) an "emerging market" fund -- no BRIC companies, rather small country "Frontier" market investments: Africa 47%, Middle East 9% (Egypt less than 2%)... Link:
https://secure.wasatchfunds.com/Our-Funds/Overview.aspx?fund=WAFMX

I bought a chunk of WAFMX when my MorganStanley FFD converted to open-end MFMIX (institutional shares that I can not longer acquire). BTW, Barron's 8April2013 cover on active managers included an interview with Geritz. Link:
http://online.barrons.com/article/SB50001424052748704882404578390772279784116.html#articleTabs_article=1

BenWP

Reply to @OregonDan: I too had some FFD, but I have kept MFMIX. It's tough to find an equivalent CEF and the frontier market ETFs are decidedly unattractive. I'll watch WAFMX.

willmatt72

I took the plunge today and opened up a starting position in GPROX, which seems to be a broad-based, small-cap international play with a dose of EMs. Due to the volatility of the sector, DCA'ing seems to be the way to go with this fund. I like the managers' history at Wasatch.

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