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In your opinion, does it make sense to hold both funds? There seems to be some overlap with the predominantly Asia holdings, and both do hold emerging markets (SFGIX has a higher %). The differences appear to be the Japan (MAPIX) and Latin America (SFGIX) holdings. Thoughts?
I hold both, MAPIX partly because I've held it for a long time and it's done well for me and partly because I don't have much exposure to Japan in other holdings. I hold SFGIX as my larger cap emerging markets fund and GPEOX as my small cap EM fund. I'm happy to hold all 3 to benefit from their specific expertise even if that sometimes leads them to the same place.
Both are well-run funds that strive to limit downside risk. For conservative, total return investors, these are good options. Dow capture ratios are 65.0 for SIGIX and 45.1 for MAPIX, both really good. And both have very strong alpha numbers and relatively low betas. And there is surprisingly limited overlap of holdings. They are good alternatives to EM index funds for those who want less volatility.
Based on M*'s X-ray tool I believe I could look at very close to if not all of the combined holdings. They appear to share 3 common investments- Samsung, Taiwan Semiconductor Mfg and Fuyao Glass Industry Group. These holdings represent 7.57% of SFGIX and 5.8% of MAPIX. As Maurice rightly pointed out I don't think I'd be too concerned about the overlap.
I do hold them both. My MACSX holding followed Foster to SFGIX and when MSMLX disappointed, my small cap money went to Grandeur Peak. Decided to keep a fairly small position in MAPIX. It's a solid fund and my only Matthews position.
I invest in MAPIX, and not SFGIX. Unlike Ted, I won't whip you with a wet noodle for holding both funds.
In looking at the top 25 holdings of each fund as reported in Morningstar, I don't see that much overlap by security. How did you determine that there is appreciable overlap?
Hi Maurice, I was looking at region-specific holdings only, not specific securities.
Region specific overlap is OK by me, since both funds are managed for conservative growth. MAPIX has geographic restrictions, and SIGIX is actually weighted pretty close to the MSCI EM benchmark, a bit under in Europe and a bit higher in Latin America. The benchmark weighting to Asia is 73%, and Foster has 72% there. The difference for SIGIX is that Foster's allocation is lower in EM than developed. Benchmark is 70 EM and 30 Developed. Foster is 56% EM and 44% Developed. That is where you really get the lower volatility, owning EAFE companies that derive a lot of their income from EM countries. So very little meaningful overlap at all.
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Regards,
Ted