Seeking value primarily in developed markets worldwide

The global value portfolio is constructed from an equity universe composed of companies with market capitalizations typically greater than $1 billion located throughout the global developed and emerging market countries. Through rigorous, bottom-up company analysis, we seek to identify undervalued stocks with upside potential. The investment process comprises three stages: quantitative screening and initial analysis, fundamental research and portfolio construction.

Strategy overview

The portfolio managers discuss our Global Value strategy.

Portfolio managers

Fundamental Portfolio Manager
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
Chief Executive Officer
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -2.7%-2.7%6.3%2.5%9.6%8.1%10.1%
Strategy (net) -2.7%-2.7%5.7%2.1%9.1%7.5%9.5%
MSCI ACWI -0.4%-0.4%17.6%8.5%14.2%9.5%8.3%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -2.7%-2.7%6.3%2.5%9.6%8.1%10.1%
Strategy (net) -2.7%-2.7%5.7%2.1%9.1%7.5%9.5%
MSCI ACWI -0.4%-0.4%17.6%8.5%14.2%9.5%8.3%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 33.9%4.9%4.9%5.1%8.5%9.0%10.3%
Strategy (net) 33.8%4.4%4.4%4.6%8.0%8.4%9.7%
MSCI ACWI 14.8%16.8%16.8%10.6%12.9%9.7%8.4%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 33.9%4.9%4.9%5.1%8.5%9.0%10.3%
Strategy (net) 33.8%4.4%4.4%4.6%8.0%8.4%9.7%
MSCI ACWI 14.8%16.8%16.8%10.6%12.9%9.7%8.4%
Fund 202020192018201720162015201420132012201120102009
Strategy (gross) 4.9%23.0%-10.0%18.8%8.7%-5.4%7.1%31.8%18.3%-0.2%19.8%41.7%
Strategy (net) 4.4%22.4%-10.4%18.3%8.2%-5.8%6.7%31.2%17.4%-1.1%18.8%40.5%
MSCI ACWI 16.8%27.3%-8.9%24.6%8.5%-1.8%4.7%23.4%16.8%-6.9%13.2%35.4%
Strategy (gross)
Strategy (net)
MSCI ACWI
202020192018201720162015201420132012201120102009
4.9%23.0%-10.0%18.8%8.7%-5.4%7.1%31.8%18.3%-0.2%19.8%41.7%
4.4%22.4%-10.4%18.3%8.2%-5.8%6.7%31.2%17.4%-1.1%18.8%40.5%
16.8%27.3%-8.9%24.6%8.5%-1.8%4.7%23.4%16.8%-6.9%13.2%35.4%

Portfolio (as of January 31, 2021)

Benchmark: MSCI ACWI
Asset Allocation
Strategy
Stocks 98.0%
Cash 2.0%
Strategy Characteristics
Strategy Benchmark
No. of holdings 53 2961
Weighted avg. market cap (US $MM) $88,115 $278,608
FY2 price/earnings 13.4 18.1
Price/book value 1.7 2.8
Dividend yield (%) 1.8 1.8
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 3.5%
Alphabet, Inc. United States 3.4%
Samsung Electronics Co., Ltd. South Korea 3.4%
Rolls-Royce Holdings Plc United Kingdom 3.1%
Ashland Global Holdings, Inc. United States 2.9%
Novartis AG Switzerland 2.8%
Takeda Pharmaceutical Co., Ltd. Japan 2.6%
The Walt Disney Co. United States 2.6%
UniCredit S.p.A. Italy 2.5%
BASF SE Germany 2.5%

A “weighted average” measures a characteristic by the market capitalization of each stock. Price/book ratio is the weighted average of the price/book ratios of all the stocks in a portfolio. The P/B ratio of a company is calculated by dividing the market price of its stock by the company’s per-share book value. The price/earnings ratio is the weighted average of the price/earnings ratios of the stocks in a portfolio. The FY2 P/E ratio is a forward P/E ratio using a next-twenty-four months EPS estimate in the denominator.

Holdings are subject to change.

SECTOR WEIGHTS
Sector Strategy Benchmark
Information Technology 23.5% 22.0%
Financials 17.6% 13.3%
Industrials 16.0% 9.5%
Health Care 10.9% 12.1%
Consumer Discretionary 9.5% 13.2%
Communication Services 6.0% 9.3%
Materials 5.4% 4.9%
Utilities 3.8% 3.0%
Real Estate 2.8% 2.6%
Energy 2.5% 3.1%
Consumer Staples 0.0% 7.1%
TOP 10 COUNTRIES
Country Strategy Benchmark
United States 49.2% 57.1%
Germany 11.9% 2.5%
Switzerland 8.2% 2.5%
France 5.8% 2.9%
South Korea 5.5% 1.8%
Japan 5.2% 6.7%
United Kingdom 4.8% 3.8%
Italy 2.5% 0.6%
Spain 1.8% 0.6%
Canada 1.7% 2.7%
Regional Allocation
  • North America 50.8%
  • Europe – other 36.4%
  • Emerging Asia 5.5%
  • Pacific 5.2%

Commentary (As of January 31, 2021)

Highlights

  • After a strong start, developed equity markets gave up gains in the latter half of January as investor sentiment was dampened by a slower-than-expected global rollout of vaccines, concerns over new variants of the virus, and renewed lockdowns.
  • We currently expect additional vaccines to receive broad-based emergency use authorization in the first quarter of 2021, such as those from AstraZeneca/Oxford, Novavax and Johnson & Johnson—all of which reported high levels of efficacy. A rebound in global gross domestic product (“GDP”) growth should accelerate as the pace of vaccinations ramp up.
  • The recovery from the global healthcare crisis has proceeded with fits and starts, with short-term news flow drowning out other investment considerations such as talented managements, favorable competitive positioning, strong balance sheets, and prospects for a sharp upturn in profitability. While we believe vaccine campaigns should succeed in allowing a full reopening of global economies, we have taken advantage of investor pessimism for economically sensitive stocks.

Portfolio attribution

The Portfolio underperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the capital goods, retailing, banks, pharmaceuticals & biotechnology,and consumer services industry groups detracted from performance relative to the Index. Holdings in the consumer durables & apparel, utilities, and technology hardware & equipment industry groups, as well as an underweight position in the food beverage & tobacco and household & personal products industry groups, offset some of the underperformance versus the Index. The largest detractor was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Additional notable detractors included casino & resort company, Las Vegas Sands Corp. (United States), online travel agency, Booking Holdings, Inc. (United States), travel & tourism technology company, Sabre Corp. (United States), and financial services technology company, Fiserv, Inc. (United States). The top contributor to return was business services provider, Concentrix Corp. (United States). Other notable contributors included technology conglomerate, Alphabet, Inc. (United States), industrial conglomerate, Siemens AG (Germany), internet services provider, Baidu - ADR (China), and semiconductor company, Infineon Technologies AG (Germany).

Investment outlook

January’s slump in share prices for some of the stocks hardest hit by the pandemic does not dent our conviction. We believe some of the largest future returns should come from stocks most affected by coronavirus lockdowns like travel, travel software, leisure, and aerospace. The recovery from the global healthcare crisis has proceeded with fits and starts, with short-term news flow drowning out other investment considerations such as talented managements, favorable competitive positioning, strong balance sheets, and prospects for a sharp upturn in profitability. We believe vaccine campaigns should succeed in allowing a full reopening of global economies and have taken advantage of investor pessimism for economically sensitive stocks. Some of these company management teams have engaged in meaningful cost-cutting and efficiency improvements over the last year, positioning their firms to generate higher cash flows and earnings as revenues recover. We also focus our research efforts on areas of the market that were largely left out of the late-2020 rally boasting attractive defensive characteristics and growth. These risk reducers include high-quality pharmaceutical and consumer companies. We remain confident that many of our portfolio companies should return capital to shareholders in the form of dividends and share buybacks as vaccination efforts speed up and economies return to normality.

The market commentary expresses the portfolio managers’ views as of the date of this report and should not be relied on as research or investment advice regarding any stock. These views and the portfolio holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass. The securities identified and described above do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. Past performance does not guarantee future results. For a description of our performance attribution methodology, or to obtain a list showing every holding's contribution to the overall account's performance during the quarter, please contact our product manager, Kevin Moutes, at 310-231-6116 or [email protected].