I plan to sell my Foreign Large Growth fund next year.
It will be replaced with either an EM equity fund, Foreign Small/Mid Value fund, or Foreign Small/Mid Blend fund.
I've evaluated many mutual funds in these three categories.
The following funds are currently being considered.
Seafarer Overseas Value Institutional (SIVLX)
GQG Partners Emerging Markets Equity Inv (GQGPX)
Artisan International Explorer Advisor (ARDBX)
Fidelity International Small Cap (FISMX)
I welcome any input or new fund suggestions.
Thanks!
Comments
I'm selling VWILX - it's a very good fund (albeit volatile) but it overlaps with MIEIX.
I don't currently have much exposure to foreign small-caps / mid-caps or EM equities.
Mutual funds in one of the three categories listed in the OP will be a better fit in my portfolio.
QUSOX -Polaris Intl Small cap value. Polaris funds are a good shop under
Bernard Horn.
GPGOX - Grandeur Peak global Opps
Thanks for the suggestions!
What I ended up doing is to find a fund manager who has a good track record, and go there. I've invested with Rajiv Jain at Goldman Sachs GQG Partners for several years with GSIHX (International) and have been very pleased. I recently established a position in GQGIX (Emerging Markets). What I like about that specific EM fund is that it's about 55% in India and Brazil.
Since you appear to have a foothold in developed international markets, you may want to think about an EM position. Frankly, since I'm a bit adventurous, I'm even thinking about a focused India fund.
Thanks, I do have GQGPX on my list.
GQG Partners' rapid growth and high key-man risk (Rajiv Jain) are concerns.
What are your thoughts regarding these issues?
As for key man risk...Jain has a good team around him, but certainly needs to be careful crossing the street. In recent months, he has added portfolio managers to the funds he was managing directly to spread that burden. I'd be more concerned about the dilution of his attention. His firm has added quite a few funds under the GQG banner. It bears watching.
FYI...there are some international dividend focused funds in his family, newly launched, that I'm also eyeing.
EM can definitely be risky!
My top contender in the EM equity category is SIVLX.
As you mentioned, Seafarer has an experienced management team
and SIVLX provides a "smoother ride" than most EM equity funds.
You're fortunate to be invested in ARTKX.
The fund generated excellent long-term returns within Foreign Large Blend (10-Year: top 4%; 15-Year: top 2%).
I'm considering ARDBX which uses the same investment process as ARTKX applied to foreign small-caps.
David Samra is a Managing Director for ARDBX although he is not responsible for daily fund operations.
ARTGX is managed by Samra’s former co-manager before they split up their responsibilities into two different funds but they share the same stock picking process. And it reflects on their performance. So ARTGX is a good substitute to ARTKX.
I’m through investing in foreign SC and EM now, unless some of my broader foreign funds invest in them. My advice to anyone considering these markets, is to be prepared for a long wait before making any money— unless you get lucky with your timing. I’ll be 70 in January, and I might not live long enough to see them make money. Good luck!
1. SIVLX (EM Value) is GMO's favorite sector for return-to-the-mean (RTTM) over the next 7 years. For what that's worth (GMO's record is fairly spotty). I am invested in FEDDX in a slightly blendier space. Seafarer seems like a solid, shareholder-friendly house.
2. FISMX: I am a fan. Owned it for a while, and recently added. Foreign SC is another GMO favorite for RTTM outperformance.
Actively managed foreign funds present a problem. If you hold them in tax-deferred, you cannot claim a credit on foreign taxes paid. Not an issue for growthy funds (eg VWILX) that pay little/no dividends, but possibly an issue for value/dividend funds. If you hold them in taxable, you are subject to nasty CG distributions. Hence: I hold VWILX in tax deferred, and use ETFs in taxable for divvy payers (eg SCHY, DFIV, FIVA, VYMI, etc.)
That leaves the question of where to hold funds like SIVLX, FISMX, and FEDDX. I choose to hold them in tax deferred. I lose a small tax credit, but I avoid getting whacked by CGs in taxable.