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

Chief Executive Officer
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
Fundamental Portfolio Manager
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) 8.8%-29.9%-24.4%-4.8%-1.9%5.8%8.4%
Strategy (net) 8.8%-30.0%-24.8%-5.2%-2.3%5.2%7.7%
MSCI ACWI 10.8%-12.8%-4.4%5.0%4.9%7.5%7.0%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 8.8%-29.9%-24.4%-4.8%-1.9%5.8%8.4%
Strategy (net) 8.8%-30.0%-24.8%-5.2%-2.3%5.2%7.7%
MSCI ACWI 10.8%-12.8%-4.4%5.0%4.9%7.5%7.0%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -35.6%-35.6%-28.9%-7.1%-2.7%5.0%7.9%
Strategy (net) -35.7%-35.7%-29.2%-7.5%-3.2%4.4%7.2%
MSCI ACWI -21.3%-21.3%-10.8%2.0%3.4%6.4%6.5%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -35.6%-35.6%-28.9%-7.1%-2.7%5.0%7.9%
Strategy (net) -35.7%-35.7%-29.2%-7.5%-3.2%4.4%7.2%
MSCI ACWI -21.3%-21.3%-10.8%2.0%3.4%6.4%6.5%
Fund 20192018201720162015201420132012201120102009
Strategy (gross) 23.0%-10.0%18.8%8.7%-5.4%7.1%31.8%18.3%-0.2%19.8%41.7%
Strategy (net) 22.4%-10.4%18.3%8.2%-5.8%6.7%31.2%17.4%-1.1%18.8%40.5%
MSCI ACWI 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
20192018201720162015201420132012201120102009
23.0%-10.0%18.8%8.7%-5.4%7.1%31.8%18.3%-0.2%19.8%41.7%
22.4%-10.4%18.3%8.2%-5.8%6.7%31.2%17.4%-1.1%18.8%40.5%
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 April 30, 2020)

Benchmark: MSCI ACWI
Asset Allocation
Strategy
Stocks 98.8%
Cash 1.2%
Strategy Characteristics
Strategy Benchmark
No. of holdings 51 3043
Weighted avg. market cap (US $MM) $81,753 $189,730
FY2 price/earnings 10.6 15.4
Price/book value 1.1 2.1
Dividend yield (%) 2.7 2.4
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 3.7%
Takeda Pharmaceutical Co., Ltd. Japan 3.6%
SYNNEX Corp. United States 3.3%
UniCredit S.p.A. Italy 3.1%
Citigroup, Inc. United States 3.1%
British American Tobacco plc United Kingdom 3.0%
Leidos Holdings, Inc. United States 3.0%
BASF SE Germany 3.0%
Oracle Corp. United States 2.9%
FANUC Corp. Japan 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 20.9% 19.3%
Industrials 18.3% 9.4%
Financials 14.7% 14.0%
Health Care 12.1% 13.4%
Materials 9.8% 4.5%
Communication Services 9.7% 9.4%
Consumer Discretionary 8.3% 11.3%
Consumer Staples 3.0% 8.4%
Real Estate 1.2% 3.1%
Utilities 0.8% 3.4%
Energy 0.0% 3.9%
TOP 10 COUNTRIES
Country Strategy Benchmark
United States 36.9% 56.2%
United Kingdom 13.0% 4.5%
Germany 12.1% 2.5%
Switzerland 7.2% 2.8%
Japan 7.0% 7.1%
China 5.4% 4.4%
South Korea 5.1% 1.4%
France 3.4% 3.2%
Italy 3.3% 0.7%
Netherlands 2.6% 1.2%
Regional Allocation
  • Europe – other 42.7%
  • North America 41.5%
  • Emerging Asia 8.2%
  • Pacific 6.5%

Commentary (As of April 30, 2020)

Highlights

  • After the severe shock of the COVID-19 pandemic in March and the subsequent emergency relief measures provided by monetary and fiscal authorities worldwide, global equities rebounded in April.
  • Market participants have typically anticipated the benefits (and liquidity surge) of monetary and fiscal stimulus. Equity markets’ sharp rebound in April suggests the short-term bottom of the current crisis was around March 23, when governments and central banks around the world enacted massive stimulus programs.
  • We have used the market weakness—especially the punishing of economically sensitive stocks—to buy in our view some of the world’s best placed and best managed companies in sectors that historically recovered the fastest from bear markets.

Portfolio attribution

The Portfolio underperformed the Index during the month, due primarily to country allocation (a byproduct of our bottom-up stock selection process). Holdings in the capital goods, transportation, and media & entertainment industry groups, along with an underweight position in the retailing and energy industry groups, detracted from performance compared to the Index. Portfolio holdings in the consumer services, insurance, automobiles & components, food beverage & tobacco, and semiconductors & semi equipment industry groups contributed to relative performance. The largest detractor was power & healthcare conglomerate, General Electric Co. (United States). Additional notable detractors included lightweight metals processing company, Howmet Aerospace, Inc. (United States), passenger & cargo airline company, Air France-KLM SA (France), aerostructure supplier, Spirit AeroSystems Holdings, Inc. (United States), and jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). The top contributor to return was automobile manufacturer, Volkswagen AG (Germany). Other notable contributors included cruise ship operator, Norwegian Cruise Line Holdings Ltd. (United States), Takeda Pharmaceutical Co., Ltd. (Japan), design-to-distribution business process services technology company, SYNNEX Corp. (United States), and robotics manufacturer, FANUC Corp. (Japan).

Investment outlook

In past crises (such as the 1997 Asian financial crisis, the 2008-2009 Global Financial Crisis, and the 2011 European debt crisis), markets reached the bottom, and subsequently began their recovery many months before the recovery became evident in the economic data. Market participants have typically anticipated the benefits (and liquidity surge) of monetary and fiscal stimulus. Equity markets’ sharp rebound in April suggests the short-term bottom of the current crisis was around March 23, when governments and central banks around the world enacted massive stimulus programs. This crisis differs from prior periods of economic contraction in its origin: a global pandemic and government-mandated closures. For consumers and businesses alike, a sustained recovery in confidence will require effective therapies to mitigate the severity of COVID-19. Our healthcare research indicates that the development of such therapies this year is possible, with the potential for mass produced vaccines by mid- to late-2021.


We have used the market weakness—especially the punishing of economically sensitive stocks—to buy, in our view, some of the world’s best placed and best managed companies in sectors that historically recovered the fastest from bear markets. We have funded this buying by reducing the portfolio’s exposure to stocks in the telecommunications, healthcare, and consumer staples sectors, and reinvesting in companies in the industrials, financials, and information technology sectors. Investors appear to have no patience to wait for recoveries in some of these companies most negatively affected by the shutdowns, such as those in the aerospace and aviation industries, and those exposed to the travel & leisure industry. We believe that buying these stocks at such low prices relative to their normalized earnings potential will benefit the portfolio in the years ahead.

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].