Global equity funds differ from international stock funds in that they have the latitude to invest in U.S. stocks as well as foreign companies. Indeed, the majority of global stock portfolios are mandated to keep most of their assets in U.S. holdings, while the international segment typically is allocated to issues from the developed countries of Western Europe and Asia-Pacific.
The sector has closely matched the performance of the S&P 500 index over the past year, while significantly outperforming the benchmark over the longer three- and five-year terms.
One of the top performers among global stock funds, the $7.4-billion Janus Contrarian Fund, seeks out-of-favor companies believed to have unrecognized value.
Portfolio manager David Decker may invest without regard to cap size–however, with an average weighted market cap of $22-billion, the fund has a decidedly large-cap flavor.
With 70 names in the portfolio, the top ten holdings represented 36.4% of total assets as of April 30, 2007. Turnover is relatively low, at 39.0%.
The fund had 58.0% of its assets invested in the U.S. as of April 30, with the Pacific Rim (at 17.3%) representing the largest foreign regional allocation.
One of the best longer-term performers in this arena, the Polaris Global Value Fund, typically invests in a portfolio of 50-100 companies, diversified across 15 countries and 15 industries.
Portfolio manager Bernard R. Horn, Jr. espouses a “pure value” investment philosophy, with special emphasis on identifying companies with “the most undervalued streams of sustainable cash flow.”
U.S. equities represented the top country allocation (32% as of December 31, 2006), followed by significant positions in Japan (13%), U.K. (8%), Finland (7%) and South Africa (6%).
Initial investments are equally weighted, and the fund has historically averaged an annual turnover rate of about 28%.