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Alternative to Artisan International Value (ARTKX)?

I've been planning to liquidate our holding in Matthews Pacific Tiger (MAPTX) and was going to put that money into Artisan International Value (ARTKX), but have discovered it is closed to new investors; bummer!

What alternatives would you suggest? My priorities:
1. Long-term, sustained outperformance versus a relevant benchmark
2. stable management
3. low fees (expense ratio); no-load
4. low turnover
5. available from our Vanguard brokerage account
6. invests primarily overseas; we already have plenty of US-based investments

Thanks for any suggestions!
Randy
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Comments

  • Have you looked at Matthews Asia ETFs?
    Unrelated, but I recently switched MATFX (w/painful distributions) to MINV.
    https://www.matthewsasia.com/funds/etfs/
  • edited April 2023

    I've been planning to liquidate our holding in Matthews Pacific Tiger (MAPTX) and was going to put that money into Artisan International Value (ARTKX), but have discovered it is closed to new investors; bummer!

    What alternatives would you suggest? My priorities:
    1. Long-term, sustained outperformance versus a relevant benchmark
    2. stable management
    3. low fees (expense ratio); no-load
    4. low turnover
    5. available from our Vanguard brokerage account
    6. invests primarily overseas; we already have plenty of US-based investments

    Thanks for any suggestions!
    Randy


    Have you considered Vanguard International Growth?

    1. Top-decile 10 Yr and 15 Yr fund category returns (period ending 03-31-23)
    2. Schroder Investment Management advised since 1981; Baillie Gifford advised since 2003
    3. Expense Ratio: VWILX - 0.34% ($50K min.); VWIGX - 0.45% ($3K min.)
    4. Turnover: 2019 - 13%; 2020 - 20%; 2021 - 25%; 2022 - 15%
    5. Available via Vanguard brokerage
    6. 87% foreign; 13% U.S. (as of 01-31-23)

    Vanguard International Growth is a volatile fund with a standard deviation of 25.16 as of 03-31-23.
    M* classifies the fund as high risk relative to the Foreign Large Growth fund category.
    VWILX performance in 2022 was terrible - it declined 30.79%.

  • edited April 2023
    James Anderson retired in 2022 from VWIGX /VWILX. He was the lead Baillie Gifford (70% of fund AUM) manager who very successfully ran "high focus", "concentrated", "aggressive" strategy. The "international" is interpreted generously, so North American exposure is 14.3%.

    Schroders is the other manager with 30% AUM and follows tamer growth strategy.

    Question should be - how effectively Anderson trained his Baillie Gifford colleagues who had some overlaps with him?

    NOT a sleep-well fund.
  • edited April 2023
    James Anderson chaired Baillie Gifford's international growth portfolio construction group
    in addition to managing Vanguard International Growth and two other U.S. mutual funds.
    He was instrumental in developing/implementing the firm's successful global growth investing strategy.
    However, Baillie Gifford (BG) has a deep bench and Mr. Anderson's succession was well-planned.
    Thomas Coutts (joined BG in 1999) has managed the fund alongside Anderson since 2016.
    Lawrence Burns (joined BG in 2009) was added as a fund manager in 2020.
  • TAVFX is worth a look. This one is rising from the ashes.
  • @randynevin, I've been hoping Mona or one of the other lucky shareholders would put in a good word for those of us coveting a position in ARTKX. (Ha.)
  • Although it's not mentioned here very often these days SGENX was highly thought of at one time. It might be worth a peek.
  • I hesitate to reply to this post since we don’t know @randynevin’s risk tolerance.

    MAPIX is a fairly aggressive Asia-focus fund relative to a broadly diversified developed market fund such as ARTKX. VWILX is also quite aggressive with 30% emerging market exposure (20% to China). Over the long term the fund has done well but last year it lost 30.8%. That is something @@randynevin can decide.
  • Agreeing with @Observant1's comments: Thomas Coutts has been the lead manager on the pure Baillie Gifford international fund, BGETX, since inception. Until 2021, that fund tracked VWIGX extremely closely (see Portfolio Visualizer graph).

    The relative underperformance of Coutt's' fund BGETX since the start of 2021 may be attributed to that fund being "purer" growth than VWIGX. The Vanguard fund gets some "tamer growth" (per Yogi) from the 30% managed by Schroeders. The Schroeders component explains virtually all the difference. This can be inferred from this PortfolioVisualizer graph. It compares (since Jan 2021) BGETX, VWIGX, and SCIEX (pure Schroeders, managed by the same Schroeder managers as on VWIGX).

    In case more evidence is needed, we can compare recent (post Anderson) performance of VWIGX with a pure Anderson fund. Yes, he's still managing an international fund, just not one based in the US. Desjardins Overseas Equity Growth, out of Canada. Anderson's the sole manager, and like VWIGX, this fund has 14% of its equity in the US with the rest outside of the US and Canada.
    https://www.morningstar.ca/ca/report/fund/portfolio.aspx?t=0P00011073

    In 2022, Anderson's fund ranked at the 100th (Canadian) percentile, losing 33.12% while Coutts' BGETX lost 34.43%. YTD, the former gained 10.47% while the latter gained 11.27%. Hard to tell the two apart. At least from a distance.
    https://www.morningstar.ca/ca/report/fund/performance.aspx?t=0P00011073

    As others have stated, analysts play a large role.
    Baillie Gifford’s staff turnover is negligible, at around 5% per year. Many analysts come straight from university and stay with Baillie Gifford for their whole career.

    In a recent research note, Winterflood points out that other partners have left without any apparent impact on their funds.
    https://portfolio-adviser.com/will-baillie-gifford-avoid-the-major-transition-pitfalls-as-growth-architect-james-anderson-leaves/
  • edited April 2023
    Several Matthews Asia funds were mentioned.
    I personally would stay away from all Matthews Asia funds in the near-term (possibly long-term).
    There has been an exodus of talent at the firm over the past few years.

    https://www.mutualfundobserver.com/discuss/discussion/comment/152046
    https://www.mutualfundobserver.com/discuss/discussion/comment/156101
    https://www.mutualfundobserver.com/discuss/discussion/comment/159415


  • edited April 2023
    I own ARTKX and like the fund. You might want to look at Causeway International Value, CIVVX. There seems to be similarities between the two funds. Both are managed by a group of good folks. Both are large cap blend. I think CIVVX is more value leaning. Both are Europe centric. Both have concentrated portfolios. Both have a good slug of Financial Services. I like ARTKX more because it has a lower SD. Just a thought. AJ, do you want my ARTKX when I liquidate my position;-)
  • Just a thought, the lead manager of ARTGX was a long-time portfolio manager of ARTKX before Artisan split up the team between the 2 funds.
  • Mona said:

    I own ARTKX and like the fund. You might want to look at Causeway International Value, CIVVX. There seems to be similarities between the two funds. Both are managed by a group of good folks. Both are large cap blend. I think CIVVX is more value leaning. Both are Europe centric. Both have concentrated portfolios. Both have a good slug of Financial Services. I like ARTKX more because it has a lower SD. Just a thought. AJ, do you want my ARTKX when I liquidate my position;-)

    Why sure, Mona. But I'm thinking that may be when the mythical hot spot drops below freezing.
  • edited April 2023
    Perhaps we should look into @LB article on Barron’s with respect to active foreign funds/ETFs. Thanks to @yogibearbull, he has summarized these funds.
    Barron’s Funds Quarterly (2023/Q1–April 10, 2023)
    https://www.barrons.com/topics/mutual-funds-quarterly

    (Performance data quoted in this Supplement are for 2023/Q1 and YTD to 3/31/23)

    Pg L3: After lagging for several years, the INTERNATIONAL/GLOBAL funds are relatively cheap (value cheaper than growth) and may outperform. Use risk control strategies – lower SDs, favorable U/D CR, etc. For the US investors in foreign funds, a strong DOLLAR has been a headwind. OEFs: AIVBX, BISAX, FISMX, FMIJX, GQGPX, RNWOX, SGENX, SIGIX, TBGVX; ETFs: ACWV, EFA, EFAV, EFG, EFV, EEM, HDG, HEFA, VIGI. (By @LewisBraham at MFO)

    Pg L8: The US-China DECOUPLING will take a while. China has also been tough on its big techs. But small-caps have escaped the watchful eyes of the Chinese government. OEFs: FHKCX, MCDFX, MCHFX, MCSMX, RNWOX, SIGIX, SGOVX; ETFs: ASHR, CHIQ, CNYA, CQQQ, CXSE, EWH, FXI, GXC, KBA, KWEB, MCHI, PGJ. (By @LewisBraham at MFO)

    Pg L9: GROWTH funds are rebounding, but be selective. Some former big techs have fallen off the growth wagon and some energy companies have joined. Large-cap growth (IVW, MGK, RPG, SCHG) has been outperforming small/mid-cap growth (IJT, RZG). The OEFs mentioned are HCAIX, TRBCX, VWIGX.

    EXTRA: FAITH-BASED funds cover a wide variety and several are rebounding. Vatican published its investment guidelines in November 2022 that also included responsible ESG. Private direct-indexing is a growing area. (By @LewisBraham at MFO)

    Fund news from elsewhere in Barron’s (Forthcoming Part 2).

    Pg 13, FUNDS. MUNI MONEY-MARKET funds (tax-exempt) with near juicy 4% yields are attractive. This is a tiny area with $130 billion AUM only vs $500 billion AUM pre-GFC-2008, and $5 trillion AUM for taxable money-market funds. These invest in floating-rate munis (VRDNs) that reset rates weekly according to the SIFMA rates. Typically, the SIFMA rates are 40-80% of (taxable) fed fund rates, but they are elevated now due to redemptions to pay taxes (so, these high rates may not last beyond April). These funds partner with BANKS to provide daily and weekly liquidity guarantees. By definition, their DURATION is considered to be the rate reset period regardless of the maturities of the underlying munis (so, don’t get alarmed when looking at their holdings and maturities). Mentioned are FTEXX / FTCXX, SWTXX, VMSXX, VTMXX. (Their overall structure and rate resetting process seem complicated and may have unknown risks)

    Pg 24, INCOME INVESTING. Selected REITs are attractive after their recent battering. Their earnings have been cut but the SP5500 earnings remain OK (so, the REITs client companies are doing fine). A FED pause will benefit the REITs, but RECESSION won’t, so it’s time only to nibble in REITs. Attractive REITs are industrial (PLD, ADC, GLPI), residential, self-storage, data-centers. Avoid REITs for offices and malls (big/regional or strip/local). Several publicly traded REITs are more attractive than private real estate (that suffer from lagging mark-to-market; negative news on monthly/quarterly redemption limits for several nontraded-REITs).

    Pg L33: In 2023/Q1 (SP500 +7.50%): Among general equity funds, best were LC-growth +13.52%, multi-cap-growth +11.35%, and worst were small-cap-value +0.77%, mid-cap-value +0.84%, equity-income +0.95%; ALL general equity categories were positive AGAIN. Among other equity funds, the best were sc & tech +18.80%, telecom +11.66%, global large-cap-growth +11.10%, and worst were financials -7.77%. Among fixed-income funds, domestic long-term FI +2.55%, world income +2.96%; ALL FI categories were positive too AGAIN (FI isn’t very refined in Lipper mutual fund categories listed in Barron’s). So, good 2022/Q4 (value shined) & 2023/Q1 (LC growth shined).
    LINK
    https://mutualfundobserver.com/discuss/discussion/60940/barron-s-funds-quarterly-2023-q1-april-10-2023#latest


  • ARTKX is categorized as international large cap value. I compared its metrics to a ARTGX plus a bunch of ILCV funds. What stood out was the ARTVX had a far lower Ulcer Index than its peers, so I ran a second screen for ILCV funds with an APR over 10 and an Ulcer Index under 10. I sorted those by Sharpe ratio and checked the correlation of the three most promising to ARTKX.

    Franklin Templeton International Low Vol, Hi Div ETF (LVHI) - better than ARTKX in every way over the past three years except total return LVHI book 15%, ARTKX 21%. The R2 is 85.

    Causeway International Value (CIVIX) - same returns, higher volatility. The R2 is 96.

    Fidelity International Value (FIVLX) - lower returns (17 vs 21%), comparable Ulcer Index (7.2 vs 6.5). High correlation (98) to Artisan, which implies they're playing the same game but Artisan is playing it better.

    Artisan Global Value (ARTGX) - high correlation (97) but slightly trails ARTKX in pretty much all metrics.

    All are top tier since the screen started with low Ulcer / high returns.

    For what interest that holds,

    David
  • @Sven I believe that open Artisan funds are available at Vanguard Brokerage.
  • edited April 2023
    Thank you very much @Mona. I stand corrected, and will correct my earlier post. At one point I was only able to invest with Fidelity since Artisan funds were not part of Vanguard NLT platform.
  • edited April 2023
    Finding a good substitute for ARTKX is a tough one as it has had terrific outperformance. Although the strategy is different as it invests in smaller companies, the new Artisan International Explorer or ARDBX is also run by Samra: https://artisanpartners.com/content/dam/documents/fact-sheets/vr/2022/4q/ARDBX-Fact-Sheet-4Q22-vR.pdf My concern here is small-caps can be considerably more volatile even with a talented manager like Samra.
  • My personal favorite is MIEIX which has top decile performance for the 1,3, 5 and 10 year time frames…
  • edited April 2023
    @LewisBraham: a video interview with ARDBX’s two co-portfolio managers, shows that they were former Artisan employees trained by David Samra. Each left Artisan for other positions, but were brought back 2-3 years ago by Samra to be part of the International Value team. Once they got a big cash position invested, the ARBDX team has been out front of the competition in 2023. Very promising.
  • edited April 2023
    @BenWP It is certainly an interesting fund for those who want exposure to the Artisan team. But the more I look at ARDBX, the more I think it is truly a different animal from ARTKX. Not just small-caps, but highly concentrated in just 34 stocks. I would expect significantly more volatility. My thinking is it could be a good satellite international position, but not a core one, a way to get exposure to this talented management team, but not ARTKX's particular portfolio or style. ARTKX is also concentrated in 53 stocks, but those are big blue chips, less risky. I think the decision comes down to whether an investor wants a stylistic clone to ARTKX--that is not ARDBX--or exposure to ARTKX's managers/analysts--that is ARDBX.
  • edited April 2023
    ARTBX’s YTD return is 14.6%, very impressive.

    ER is 1.42%. Portfolio’s market capitalization is $600 M (small caps) and the benchmark the fund used is MSCI AC World Ex USA Small Cap Index. Additionally, the fund has 26% small cap emerging market exposure.
    https://artisanpartners.com/individual-investors/investments/international-value-team/international-explorer-fund-ardbx.html

  • edited April 2023
    I have owned VWIGX for 30 years and 2 months. Annual returns over that period work out to 6.91. Can't say I'm excited about it. But it does show what a small investment can turn into over 30 years. And someday it will be the kids' problem.

    Within the past couple of years I purchased IHDG and FYLD for their yield. They held up better than VWIGX during the recent excitement. But neither has a long track record.

    So far, I haven't had to tap either for yield. So far, I am happy with them.
  • edited April 2023
    Just to point out some loophole: If you have more than 250K in any set of Artisan funds, you can buy any closed Artisan fund. From their prospectus about the required condition: "You are a shareholder with combined balances of $250,000 in any of the Funds..."
  • @LewisBraham: I agree, it’s not a core international fund. What I am using now is a combination of DIVI, MOTI and FNDF, as no one international fund seems to check all the boxes. I remember a discussion here about how long Artisan seemed to be taking to get the new fund introduced after the new team members were hired. Prudent planning may be paying off. DIVI, open since 2016, changed indexes fairly recently and now follows the Morningstar Developed Markets ex-North America Target Market Exposure Index-NR.

  • rmt
    edited April 2023
    Is ARDBX or SIVLX available as NTF in any brokerage?
  • edited April 2023
    Vanguard charges $20 per trade for TF funds.
    Investors with $1M - $5M in eligible funds can execute 25 trades gratis per calendar year.

    Fidelity charges $49.95 to buy TF funds but there are no fees to sell.
    It appears the $5 automatic investment option (after initial investment) at Fidelity may be available for ARDBX.
    Interested parties should probably contact Fidelity to confirm this is correct.
  • Postscript: Thanks for all the valuable comments. I decided to start reinvesting the MAPTX proceeds into VWILX (Vanguard International Growth Admiral), in monthly chunks, until we're up to where we were in MAPTX.

    The first choice, and most obvious standout, was ARTKX, but since it is closed I had to go elsewhere. If it opens up in the future with the same manager I'll seriously consider opening a position there too, as the steady outperformance has been impressive.
  • edited April 2023
    Check FMI international FMIJX. It was discussed a lot here as well on M* forums when it was a top performer for a few years. As usual, it is not mentioned anywhere as it's been underperforming for the last few years. I held ARTKX for a long TIME in one account or another, and bought it in my retirement account when they announced about closure.

    Also, check VTRIX, VWICX, and Avantis International Large Value ETF AVIV if you are OK with ETFs.
  • @mrc70 I believe you meant FMIJX.
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