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Managers Tweak Funds For Rotation To Foreign Stocks
I did hold off on selling certain international funds I wanted to harvest gains from. Keeping a close eye. As I have been "fixing" my portfolio, I have paid less attention to my international exposure. I have some work to do.
If you’ve been consumed the past few months by the implications of potential Federal Reserve tapering on the U.S. markets, you may have missed a compelling investing opportunity worth some financial research: Europe is getting some serious love as an area ripe for value investors.
While European unemployment remains painfully high, economists, market strategists and money managers are eyeing key data out of Europe and coming to the conclusion that the proverbial corner has been turned.
Moody’s Analytics senior economist Glenn Levine pointed to the improving balance sheets of Europe’s corporations, improving euro purchasing managers’ index readings and the beginning of rising output from key economies as positive continental green shoots. “In the past week, a spate of industrial production figures confirmed a steady acceleration in European factories … businesses typically lead the business cycle, and Europe appears to be in the initial stage of a recovery” Levine wrote in an August 9th note.
I recently added to my global stock fund positions and reduced my allocation in my fixed income sleeve of my portfolio this past week. My new targets are 20% cash, 25% income (decreased by 5%), 45% equity (increased by 5%) and 10% alternative.
The below link will take you to a thread ... started by Jerry and to my comment flagged to Art ... that will describe my current thinking on this in more detail.
Kenster, What do you think of Herro's strategy here on European banks and Europe in general? It seems like I'm hearing more and more stories about how Europe is the next place to invest. I'm a bit worried that I am a bit late on this. Thoughts?
Reply to @MikeW: I don't think you are too late. European market is improving although slowly; hence the opportunity is ahead of us. Remember he is a deep value investor and always seeks opportunity when the market is mis-priced as in the case of European stocks.
Along the same thinking on the emerging market front, several years ago David Herro talked about investing in Japan as a backdoor play to China and the Asian emerging market at the time when the Japanese stocks were cheap. The companies he was investing have sizable business exposure in the EM. His approach would capture the upside swing while maintaining the downside risk if and when the EM cools. Fast forward several years this approach play out in his favor as OAKIX, OAKEX, and OAKWX are performing very nicely. In my humble opinion, David Herro is one of very best foreign investors.
Thanks very much for the feedback Sven. I have been following David Herro for a number of years and have always been impressed with his thought process. His funds have a wonderful track record. I am considering dividing my new fund investments between Oakmark International and Artisan Global Value. Artisan's European holdings are comparatively smaller % wise at this point, but they are a wonderful shop.
OAKIX is one of my favorite funds along with the fund that I own, ARTKX (taxable a/c). However, I want to point out that after a few years of underperformance, his fund would not look as good as it is now in retrospect (3, 5, 10 yrs, etc.)
Comments
http://www.forbes.com/sites/investor/2013/08/16/what-are-top-managers-buying-europe/
The below link will take you to a thread ... started by Jerry and to my comment flagged to Art ... that will describe my current thinking on this in more detail.
http://www.mutualfundobserver.com/discussions-3/#/discussion/7397/is-there-a-good-reason-for-a-particular-interest-level-to-get-back-into-bonds
http://www.cnbc.com/id/100979100
What do you think of Herro's strategy here on European banks and Europe in general? It seems like I'm hearing more and more stories about how Europe is the next place to invest. I'm a bit worried that I am a bit late on this. Thoughts?
Along the same thinking on the emerging market front, several years ago David Herro talked about investing in Japan as a backdoor play to China and the Asian emerging market at the time when the Japanese stocks were cheap. The companies he was investing have sizable business exposure in the EM. His approach would capture the upside swing while maintaining the downside risk if and when the EM cools. Fast forward several years this approach play out in his favor as OAKIX, OAKEX, and OAKWX are performing very nicely. In my humble opinion, David Herro is one of very best foreign investors.
However, I want to point out that after a few years of underperformance, his fund would not look as good as it is now in retrospect (3, 5, 10 yrs, etc.)