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Foreign Mutual Fund Suggestions

Observant1
edited December 2023 in Fund Discussions
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

  • PRESSmUPPRESSmUP
    edited December 2023
    Observant1 ...just curious, but which fund are you selling, and what other international funds are in your portfolio?
  • Observant1
    edited December 2023
    My current international funds are MIEIX (CIT equivalent) and VWILX.
    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.
  • Mulder420
    Take a look at

    QUSOX -Polaris Intl Small cap value. Polaris funds are a good shop under
    Bernard Horn.
    GPGOX - Grandeur Peak global Opps
  • Observant1
    @Mulder420,

    Thanks for the suggestions!
  • PRESSmUPPRESSmUP
    Your portfolio of international holdings is far greater than mine. I scaled back a few years ago, when the US repeatedly outperformed. Now, with only a 10% allocation I realize I'm a bit under-capitalized in that area. I've found it harder to slice and dice the international funds into growth/value/small cap/large cap as compared to domestic, and wonder about the utility in that exercise.

    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.
  • Observant1
    edited December 2023
    @PRESSmUP,

    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?
  • PRESSmUPPRESSmUP
    edited December 2023
    Observant1 said:

    @PRESSmUP,

    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?

    $15B for an EM fund is a bit heavy, but the holdings are not small companies, so the positions can accommodate the bulk. For now. Both this and the international fund I mentioned have attracted quite a bit of cash, perhaps due to the GS affiliation. Success draws money I suppose.

    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.


  • BenWPBenWP
    edited December 2023
    @Observant1: I have some ARDBX and SFVLX. I think it’s wise to pick a fund based on confidence in the manager or firm. I do have some PZVIX, foreign SCV, but I doubt that I need to cover all the market cap or style factors, especially in international.
  • Sven
    @Observant1, at this point of our lives, we are keenly aware of EM’s risk, especially with respect to geopolitical ones. We stay with experienced management teams such as Seafarer funds, SIGIX and SFVLX, FMIJX, and ARTKX (closed to new investors) and some VEA index fund. Other than SFVLX, the rest are larger cap funds.
  • Observant1
    edited December 2023
    Thanks, @Sven.

    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.
  • Sven
    We invested with Andrew Foster when he managed Matthew Asia Growth & Income fund and followed him to Seafarer funds. SIVLX has a sizable exposure to smaller cap stocks. Really like their stock picking process. David has a real nice write up on SIVLX in one of the commentary.

    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.
  • Tarwheel
    edited December 2023
    My experiences with foreign small caps and emerging markets have not been good. I invested in Artisan’s global small cap, and it performed so poorly that they closed it after a few years. I invested in MAPIX, and it was still losing money after more than 7 years. I invested in SFGIX, one of the better EM funds, and it had returned less than 4% annually after more than 11 years. These kind of funds tend to get destroyed in down markets, and it happens quickly.

    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!
  • changchang
    Observant1 said:

    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!

    I'm guessing this is the same question/discussion which appeared on Big Bang! but I'll chime in again here.

    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.
  • sma3
    International value funds I own, MOWNX, BISMX,COBYX (heavily invested in Latin America) have beaten the SP500 in last three years with lower drawdowns. CCISX also but with equal loss in 9/2022. Typical Emerging market funds ( SIGIX GQGPX) have not done as well, although it appears they have beaten their peers. I would look for funds that are well run, invest in areas off the beaten path and have lower correlations with the US.
  • stillersstillers
    Tarwheel said:

    My experiences with foreign small caps and emerging markets have not been good. I invested in Artisan’s global small cap, and it performed so poorly that they closed it after a few years. I invested in MAPIX, and it was still losing money after more than 7 years. I invested in SFGIX, one of the better EM funds, and it had returned less than 4% annually after more than 11 years. These kind of funds tend to get destroyed in down markets, and it happens quickly.

    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!

    I second the comments posted here. It is SO difficult to find any Foreign funds that perform comparable to Domestic funds. We get our Foreign exposure through a coupla Global funds, and that's it for us. Usually hold about 10% of our stock exposure in Foreign.

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