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.

Benchmark
MSCI ACWI
Inception
September 30, 2001
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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) 3.7%18.7%52.1%9.7%11.2%10.8%10.9%
Strategy (net) 3.6%18.3%51.4%9.2%10.7%10.2%10.3%
MSCI ACWI 3.3%16.2%29.2%14.9%14.9%11.9%8.9%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 3.7%18.7%52.1%9.7%11.2%10.8%10.9%
Strategy (net) 3.6%18.3%51.4%9.2%10.7%10.2%10.3%
MSCI ACWI 3.3%16.2%29.2%14.9%14.9%11.9%8.9%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 3.0%14.4%55.7%9.9%11.7%9.3%10.8%
Strategy (net) 2.9%14.1%55.0%9.4%11.2%8.7%10.2%
MSCI ACWI 7.5%12.6%39.9%15.1%15.2%10.5%8.8%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 3.0%14.4%55.7%9.9%11.7%9.3%10.8%
Strategy (net) 2.9%14.1%55.0%9.4%11.2%8.7%10.2%
MSCI ACWI 7.5%12.6%39.9%15.1%15.2%10.5%8.8%
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 August 31, 2021)

Benchmark: MSCI ACWI
Asset Allocation
Strategy
Stocks 97.0%
Cash 3.0%
Strategy Characteristics
Strategy Benchmark
No. of holdings 53 2964
Weighted avg. market cap (US $MM) $129,137 $333,319
FY2 price/earnings 14.9 17.7
Price/book value 2.4 3.1
Dividend yield (%) 1.5 1.7
TOP 10 HOLDINGS
Security Country Percent
Alphabet, Inc. United States 4.0%
Rolls-Royce Holdings Plc United Kingdom 3.3%
Ashland Global Holdings, Inc. United States 3.2%
Novartis AG Switzerland 3.1%
Fiserv, Inc. United States 3.0%
Concentrix Corp. United States 2.9%
Samsung Electronics Co., Ltd. South Korea 2.9%
Genpact Ltd. United States 2.8%
Booking Holdings, Inc. United States 2.8%
Sanofi France 2.8%

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 22.5% 22.6%
Industrials 13.9% 9.8%
Financials 13.4% 14.1%
Health Care 12.2% 11.8%
Materials 8.9% 4.9%
Communication Services 8.9% 9.4%
Consumer Discretionary 7.9% 12.2%
Utilities 6.1% 2.7%
Energy 2.2% 3.1%
Consumer Staples 1.0% 6.8%
Real Estate 0.0% 2.6%
TOP 10 COUNTRIES
Country Strategy Benchmark
United States 53.1% 59.8%
Switzerland 7.6% 2.5%
France 7.6% 2.9%
United Kingdom 5.6% 3.6%
Japan 5.5% 5.8%
Germany 5.0% 2.4%
Italy 3.8% 0.6%
South Korea 3.8% 1.6%
Spain 2.5% 0.6%
Canada 1.7% 2.8%
Regional Allocation
  • North America 54.9%
  • Europe – other 32.2%
  • Pacific 5.5%
  • Emerging Asia 3.8%
  • Emerging Latin America 0.6%

Commentary (As of August 31, 2021)

Highlights

  • Equities marched higher again in August, spurred by continuing ultra-loose monetary conditions, a likely multi-trillion-dollar US fiscal spending boost, and evidence of global economic recovery. Despite the increase in Covid cases linked to the spread of the Delta variant, investors appear optimistic that any impact will likely disrupt supply chains rather than spur the reinstatement of economically devastating lockdowns.
  • Strong global economic data in August confirmed a further normalization of activity in the wake of Covid lockdowns. In China, regulatory actions continued to dominate headlines. In our view, increased regulations in certain industries are long overdue. As long as they remain well-established, consistent, and transparent, our belief is that stronger standards in the country should ultimately benefit stakeholders.
  • We believe undervalued stocks will attract more buyers as the cost of money (aka interest rates) rise to more normal levels in most developed countries, reflecting economic recovery and fiscal stimulus. Companies generating solid cash flow and margins, with excellent competitive positioning, attract our attention in this environment.

Portfolio attribution

The Portfolio outperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the capital goods, materials, insurance, consumer services, and media & entertainment industry groups contributed to relative performance. Holdings in the semiconductors & semi equipment, pharmaceuticals & biotechnology, software & services, technology hardware & equipment, and consumer durables & apparel industry groups offset some of the outperformance compared to the Index. The top contributor to return was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Other notable contributors included technology conglomerate, Alphabet, Inc. (United States), specialty chemicals manufacturer, Ashland Global Holdings, Inc. (United States), business services provider, Concentrix Corp. (United States), and casino & resort company, Las Vegas Sands Corp. (United States). The largest detractor was luxury goods manufacturer & retailer, Compagnie Financiere Richemont (Switzerland). Additional notable detractors included products & services provider for the electronic components industry, SK hynix, Inc. (South Korea), travel & tourism technology company, Sabre Corp.(United States), defense & information technology services provider, Leidos Holdings, Inc. (United States), and electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea).

Investment outlook

The rise of the Delta variant portends enduring uncertainty on the timing to reach full normalization. As a result, we are interested in economically cyclical companies with, in our view, strong balance sheets focused on cutting costs. As it relates to companies exposed to travel, leisure, and hospitality, in particular, we find meaningful differentiation amongst companies. Several are exhibiting high cash burn rates, while others are approaching breakeven. We are most interested in the latter, and we engage in rigorous fundamental research to scrutinize which firms may be underappreciated in the market yet poised for, based on our analysis, greater profitability when revenues recover. Furthermore, we believe the rapid pace of change in the economy—for example, from long-dated green initiatives or supplier shifts—could lead to structurally higher earnings in this economic cycle for certain industries. The premium for growth stocks over value stocks narrowed in the wake of vaccine announcements in the fourth quarter of 2020, but overall, it remains significantly higher relative to history in a market awash with liquidity. We believe undervalued stocks will attract more buyers as the cost of money (aka interest rates) rise to more normal levels in most developed countries, reflecting economic recovery and fiscal stimulus. Companies generating solid cash flow and margins, with excellent competitive positioning, attract our attention in this environment.

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].