Dodge & Cox, the venerable active mutual fund company, has filed a registration statement with the SEC to introduce its first fund in over six years.
The Dodge & Cox Emerging Markets Stock Fund will also be the firm’s first fund focused on emerging markets, though the firm is no stranger to that universe. Its Global Stock Fund and International Stock Fund held about 13% and 18% in emerging market stocks, respectively, as of June 30.
The new fund will invest at least 80% of total assets in emerging market equities, which it defines as issuers domiciled in emerging markets and issuers that have “significantly economic exposure to emerging market countries,” even if they’re based elsewhere, according to the SEC filing.
Companies outside the MSCI developed market indexes, including frontier markets, will be considered emerging market countries, for purposes of the fund. In addition to individual stocks, the fund may invest in ETFs.
The new fund is expected to charge a 0.70% in total annual operating expenses, including a 0.60% management fee.
Like its other equity funds, the Dodge & Cox Emerging Markets Stock Fund, aims to use a bottom-up approach to investing, selecting assets its team of analysts believe are temporarily undervalued by the market but have a favorable outlook for long-term growth, according to its SEC filing.
The fund will focus on the underlying financial condition and prospects of individual companies, including future earnings, cash flow, and dividends, as well as financial strength, economic condition, competitive advantage, quality of the business franchise and its reputation, and experience and competence of management — all weighed against valuations of individual securities.
It also will consider the economic and political stability of the country where the issuer is located and the protections provided to shareholders and may invest in companies of any size, including large-, medium- and small-cap.
The fund’s portfolio managers include three members of the firm’s equity investment committee who are also managers of the firm’s International Stock Fund:
- Charles Pohl, the firm’s chairman and chief investment officer;
- Diana Strandberg, director of international equity; and
- Mario DiPrisco, vice president and research analyst who are also managers of the firm’s International Stock Fund.
The three additional portfolio managers are vice presidents and research analysts Sophie Chen, Rameez Dossa and Robert Turley.
Morningstar accords Dodge & Cox International Stock and Global Stock Funds a gold analyst rating, which translates into a strong conviction that their strategies will outperform a relevant index, or most peers, over a market cycle.
Morningstar Senior analyst Tony Thomas has described the firm’s investment committee approach for those funds as exemplary and “thoroughly contrarian,” with performances that can be volatile at times but profitable in the long run.