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  • Derf September 2021
  • MikeW September 2021
  • msf September 2021
  • Sven September 2021
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Harbor International Small Cap Investor HIISX/HAISX

This is a very interesting fund. September commentaries say: ...".over the past 2.5 years, the period roughly corresponding to Cedar Street’s management of the fund, it has been the best performing international small cap fund in existence."

On the other hand, M* gives them 5 stars but Negative rating. It is quite possible that M* gives negative ratings without full understanding of the funds. But, if I am not mistaken, Oakmark International Small Cap beats Harbor International Small Cap for the last 3 years, 2.5 years, and 1 year. And for the last 3 years WIGTX decimated both of these funds.


  • The Professor may have been looking at Lipper, which classifies WIGTX as a global small/mid cap fund. M* currently classifies its portfolio as substantially all foreign, and the fund itself as foreign small/mid growth. But with a 176% turnover rate, who knows what it looked like six months ago? I haven't gone back to check.

    ADVLX has also outperformed HAISX since 5/23/2019, albeit not by nearly as much and with a tailwind (being a growth fund). Both Lipper and M* classify it as a foreign small/mid cap fund. Just 1/40th of its portfolio contains large cap companies (HAISX has none), while it has more microcaps (6%) than HAISX (1%). In short, they're both small cap funds.

    In contrast, OAKEX is a midcap fund, with 5/8 of its portfolio in midcaps, and just 1/5 in smaller companies, none of those being microcaps.

    Portfolio visualizer comparison of the three funds

    With regard to M*'s robotic rating, it's just that. IMHO a work in progress that isn't worth paying any attention to, at least yet. Also, the negative rating is a machine's "opinion" for the whole five years the fund has been around, not just the last 2.5 years.

  • Hi @msf. Thanks for bringing these new funds to us. Can I ask you what key screening criteria you used on MFO premium to identify ADVLX? Thats not one that has come up for me before. Thzx
  • msf
    edited September 2021
    You know that expression about old dogs and new tricks? I tend to stick with M*'s premium screener (free with the legacy Roth I keep at T. Rowe Price and almost never trade).

    A relatively simple screen there:
    5* rating
    Style box = small (cap)
    Category = International Equity
    Category != World small/mid stock

    This returns four share classes: HAISX / HIISX, WIGTX, and ADVLX

    As it turns out, this is simple enough that one can get similar results with M*'s basic screener with three separate screens:

    5* rating
    Category = Foreign small/mid value

    5* rating
    Category = Foreign small/mid blend

    5* rating
    Category = Foreign small/mid growth

    On the portfolio view of the results, sort on market cap, and look at anything under $2B.

    The basic screen for sm/mid foreign value funds returns the Harbor shares and QUSOX / QUSIX. The latter (institutional class) can be purchased (TF) with a $2500 min at Schwab. Its performance comes within a hair's breadth of HAISX, 47.64% vs 47.75% cumulative from 5/23/19 to the present. QUSIX holds no companies larger than midcap (very similar to HAISX, even slightly fewer midcaps and slightly more microcaps). But QUSIX does have a tad more volatility. Here's PV's comparison.

    The screen for sm/mid foreign blend funds returns ADVLX and FISMX. (ADVLX was reclassified to blend from growth in 2021.) FISMX's performance misses by slightly more: 45.35% vs 47.75% cumulative from 5/23/19. It's tilted a bit more toward mid cap, with 8% in large caps. Aside from that, its cap distribution is little different from HAISX's, with 44% in small & microcap vs 46% for HAISX. Here's PV's head to head comparison.

    The screen for sm/mid foreign growth funds just returns WIGTX (and funds which land in the midcap range).

    This all just goes to show that tweaking screens slightly, or using screeners with different choices of criteria can get you different results.
  • The Schwab reports once in 5 attempts in top 25% . It took off , like so many other funds, after last major market correction. Watch list here.
  • msf
    edited September 2021
    Actually, HAISX's largest outperformance in 2020 was in February, when it outperformed its peers by 2.34% (-6.57% to -8.91%). In no other month of 2020 did it outperform by 2% or better.

    In only two other months did it outperform its peers by over 1%, and one of those months was January. It paced its peers in March, -19.81% vs. -19.96%.

    From March 20, 2020 through the end of 2020, it underperformed its peers, gaining 66.42% vs. its peers' 75.20%. See M* chart here.

    66.42% is not chopped liver, so it's fair to say that it took off "after last major market correction". But it's not fair to suggest that it outperformed or even matched its peers because of the bounce.

    Regarding those five attempts: Between April 30, 2019 and July 31, 2019, the new management substantially overhauled the portfolio. This became in effect a new fund. The only holdings kept (if I read correctly) were:

    Senior PLC (aerospace), added 10%, totals 1.9% of fund
    JAFCO Ltd, Japan (capital markets), 2.5% of fund

    April 30, 2019 semiannual statement, HAISX portfolio
    July 31, 2019 quarterly schedule of holdings, HAISX portfolio
  • @msf : As I said before, it's on my watch list, as are other funds. With Markets cracking new highs it's hard for me to push the buy button.
    Thanks for the addition info.
  • edited September 2021
    It appeared the change of management team from Barings to Cedar Street since 2019 has improved the performance. Brodsky and Mozes have done well in this international small cap value space.

    I have better luck with smaller cap growth funds than the value ones. Grandeur Peaks funds have done well even though they carry higher expense ratio. The hard closing of their funds makes future investing almost impossible when the funds are held at brokerages.
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