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) 0.9%-18.1%-18.6%5.7%4.2%7.5%9.3%
Strategy (net) 0.8%-18.3%-19.0%5.2%3.7%7.0%8.7%
MSCI ACWI 3.1%-17.5%-15.5%8.5%7.5%9.3%7.6%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 0.9%-18.1%-18.6%5.7%4.2%7.5%9.3%
Strategy (net) 0.8%-18.3%-19.0%5.2%3.7%7.0%8.7%
MSCI ACWI 3.1%-17.5%-15.5%8.5%7.5%9.3%7.6%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -13.8%-18.8%-16.3%3.3%4.1%7.7%9.3%
Strategy (net) -13.9%-19.0%-16.7%2.8%3.6%7.2%8.7%
MSCI ACWI -15.5%-20.0%-15.4%6.7%7.5%9.3%7.5%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -13.8%-18.8%-16.3%3.3%4.1%7.7%9.3%
Strategy (net) -13.9%-19.0%-16.7%2.8%3.6%7.2%8.7%
MSCI ACWI -15.5%-20.0%-15.4%6.7%7.5%9.3%7.5%
Fund 2021202020192018201720162015201420132012201120102009
Strategy (gross) 18.0%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) 17.4%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 19.0%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
2021202020192018201720162015201420132012201120102009
18.0%4.9%23.0%-10.0%18.8%8.7%-5.4%7.1%31.8%18.3%-0.2%19.8%41.7%
17.4%4.4%22.4%-10.4%18.3%8.2%-5.8%6.7%31.2%17.4%-1.1%18.8%40.5%
19.0%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, 2022)

Benchmark: MSCI ACWI
Asset Allocation
Strategy
Stocks 98.6%
Cash 1.4%
Strategy Characteristics
Strategy Benchmark
No. of holdings 54 2898
Weighted avg. market cap (US $MM) $77,809 $311,851
FY2 price/earnings 11.4 14.0
Price/book value 1.8 2.6
Dividend yield (%) 2.2 2.2
TOP 10 HOLDINGS
Security Country Percent
Genpact Ltd. United States 3.6%
Rolls-Royce Holdings Plc United Kingdom 3.3%
UniCredit S.p.A. Italy 3.3%
Las Vegas Sands Corp. United States 3.1%
Samsung Electronics Co., Ltd. South Korea 3.0%
Fiserv, Inc. United States 3.0%
Prudential Plc United Kingdom 2.9%
Concentrix Corp. United States 2.9%
Enel SpA Italy 2.7%
Booking Holdings, Inc. United States 2.7%

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% 21.4%
Financials 15.7% 14.3%
Industrials 15.3% 9.6%
Health Care 10.7% 12.2%
Consumer Discretionary 8.8% 11.6%
Materials 8.1% 4.6%
Communication Services 7.1% 7.6%
Consumer Staples 5.8% 7.5%
Utilities 3.9% 3.2%
Real Estate 0.8% 2.7%
Energy 0.0% 5.2%
TOP 10 COUNTRIES
Country Strategy Benchmark
United States 44.4% 61.8%
United Kingdom 15.8% 3.7%
France 8.4% 2.7%
Italy 6.0% 0.5%
Switzerland 4.4% 2.5%
Japan 4.3% 5.5%
Netherlands 3.9% 1.0%
Germany 3.7% 1.8%
South Korea 3.7% 1.3%
Canada 1.5% 3.1%
Regional Allocation
  • North America 45.9%
  • Europe – other 44.5%
  • Pacific 4.3%
  • Emerging Asia 3.9%

Commentary (As of August 31, 2022)

Highlights

  • Equity markets declined again in August in response to central banks’ commitment to tamp down inflation and growing concerns about the risks to global economic activity.
  • We currently expect inflation in the developed world to remain well above its near three-decades-long average for some time to come. The Covid pandemic highlighted the vulnerability of long and complex supply chains, and costly investment will be required as companies and their governments attempt to onshore critical production. As transitory inflation pressures have risen, stickier wage expectations will likely embed lasting inflationary pressures into developed economies.
  • In our investable universe, we believe the best-positioned industrials, materials, financials, and consumer discretionary companies—those with, in our view, balance sheet strength and excellent management teams—should lead markets upward in the next stage of the economic cycle.

Portfolio attribution

The Portfolio underperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the capital goods, insurance, consumer services, and utilities industry groups, along with an underweight position in the energy industry group, detracted from relative performance. Holdings in the media & entertainment and software & services industry groups, as well as an overweight position in the banks industry group and an underweight position in the semiconductors & semi equipment and consumer durables & apparel industry groups, offset some of the underperformance compared to the Index. The largest detractor was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Additional notable detractors included life insurer, Prudential Plc (United Kingdom), airport & rail station concessionaire, SSP Group Plc (United Kingdom), pharmaceutical giant, Sanofi (France), and defense & information technology services provider, Leidos Holdings, Inc. (United States). The top contributor to return was travel & tourism technology company, Sabre Corp. (United States). Other notable contributors included media & entertainment conglomerate, The Walt Disney Co. (United States), insurer, AXA SA (France), social media giant, Meta Platforms, Inc. (United States), and banking & financial services company, UniCredit S.p.A. (Italy).

Investment outlook

Inflationary pressures, rising interest rates, and concerns about a slowdown in global economic activity have hampered equity returns this year. The ongoing weakness in the Chinese economy just adds to the negative ramifications for the earnings of companies and industries globally. We believe central banks (other than the Bank of China) should continue raising interest rates and draining monetary liquidity from their respective financial systems, which will likely add downward pressures to valuation multiples. After a surge upward in the past 12 months, oil and gas stocks have moved down our risk-adjusted return ranking. As a result, we reduced exposure to the energy sector in favor of other economically sensitive stocks where we believe valuations offer more upside potential over the next two years. For European cyclicals in particular, rising inflation, monetary tightening, and currency weakness have weighed heavily on stock prices. However, we believe valuations are quite low, likely already discounting a recession. In our investable universe, we believe the best-positioned industrials, materials, financials, and consumer discretionary companies—those with, in our view, balance sheet strength and excellent management teams—should lead markets upward in the next stage of the economic cycle. Historically, cyclicals outperform as markets begin to discount recovery. We expect management teams of our portfolio companies to amplify profitability via leaner operations and greater efficiency (operational restructuring), creating the potential for even more uplift in their share prices.

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].