Hi, guys.
For the past two years I've been working with a small task force to redesign Augustana's retirement plan. We had laughably low participation rates, no incentives to participate and way too many options: all of Fido, T Rowe, TIAA-CREF, Thrivent (historically Lutheran college, and Thrivent is the successor to the Aid Association for Lutherans) and Vanguard.
We've made most of the structural changes we need: outreach, auto-enroll, auto-escalate, matching rather than a flat college contribution, agreement on a core list of funds and a proviso for a brokerage window through which the few active investors on-campus can access many more options. The core will offer Vanguard's target-date funds (sorry, Charles, but we're required to have a default option for employees who refuse to choose and we're legally safer in a target-date series than in a fixed hybrid portfolio), a number of index funds (Total Stock Market, et al) and a handful of active funds (likely PIMCO Inflation-Response, Low Duration, money market, DFA SCV and a few others).
Our core fund list (ones into which the college's contribution might be directed) does not have dedicated e.m. exposure. The argument is that we don't want to offer anything too risky in the core, though the brokerage window will make a substantial array available for folks who want it. (I actually argued for at least a multi-asset e.m. fund but I respect the decision the others reached.)
That's the background. Here's the question: are their core international equity funds that might offer better e.m. exposure than Dodge & Cox International (DODFX)? That's the currently-proposed international option for the core and it does have something like 18% e.m. The problem I'm having is that many funds which traditionally offered e.m. exposure (Oakmark International) decamped several years ago so merely looking at current e.m. exposure tells me very little about prospective exposure.
In general, the criteria are low cost, managed risk, stable firm.
Any thoughts?
David
Comments
Regards,
Ted
DODFX Exposure;(%)( d )
Europe (excluding United Kingdom) 49.0
United Kingdom 15.3
Japan 12.1
Africa/Middle East 7.1
Pacific (excluding Japan) 5.3
United States 5.1
Latin America 4.7
One you might consider, at least if you have access to the institutional share class, is AllianzGI NFJ International Value (ANJIX). Those shares have moderate cost, low turnover, and if one can forgive a really lousy 2013, a good track record. Currently 22% EM.
Then there's Buffalo Int'l (BUFIX). Low turnover, moderate expense for an int'l fund (1.09%), same management since founding. Buffalo funds have tended to be "theme oriented" (i.e. a bit of top-down selection). Don't know if they follow that approach with this fund. Currently 20% EM.
If you really want to boost the EM exposure, there's Forward Int'l (FFINX). Rather expensive (1.36% ER), significant turnover (92%), but 30% EM. That seems to be the "best" thing going for it.
David
Fund Name, (expense ratio), (EM%)
• American Funds EuroPacific Growth Fund - Class R-6, (.5), (15%)
• Vanguard Total International Stock Index Fund – Inst. Shares, (.12), (15%)
We also have a dedicated EM fund, which happened to close recently and was mentioned in your December commentary, Wells Fargo Advantage Emerging Markets Equity Fund.
Kevin