Two young global funds we like; two pending global funds with a lot of promise.
World-stock funds have considerable inherent allure. Thanks to their global purviews, world-stock managers can pursue the best opportunities wherever they are located; that geographic freedom is quite attractive because the top investments are normally scattered around the globe and where those stocks are located frequently changes over time. Moreover, there are many good managers from proven shops that have delivered good long-term results running world-stock funds, and those managers employ a diverse mix of strategies. (For example, while one of our four Fund Analyst Picks in the world-stock category uses a strict all-cap value discipline and another one relies on a patient and price-conscious blue-chip approach, the other two follow two different--and distinctive--growth strategies.) Thus, it comes as no surprise that there has been long-standing interest in these funds.
Meanwhile, several global funds with good pedigrees and other attributes have been launched in recent years, so world-stock fans have a greater number of good options than they did before. In fact, as we pointed out in a late-2006 column, Harbor, Oakmark, and Thornburg all introduced promising world-stock offerings that year. And, Calamos Global Equity
What's more, the stream of new, high-quality world-stock funds hasn't let up in recent months. The well-respected value boutique Tweedy, Browne opened a new global fund last September. The successful growth shop William Blair did the same a few weeks later. Industry leader Dodge and Cox recently announced that it will be opening its first global fund soon. And the low-cost powerhouse Vanguard just revealed that it will be launching a new world-stock index fund in the coming weeks. We think that all four of these funds have lots of potential. Here are the details on each.
Tweedy, Browne Worldwide High Dividend Yield Value
William Blair Global Growth
Dodge & Cox Global Stock
There are several reasons to welcome the arrival of this fund, which is slated to open in the next few weeks. Dodge & Cox is a topnotch money manager that treats its fundholders exceptionally well. The four other offerings in the family lineup rank among the very best in their categories. This fund will be run by a six-person team of Dodge & Cox veterans who have a considerable amount of domestic, foreign, and other investment experience. And the value-oriented stock-selection discipline that the team will be using here is the same as the one that produced terrific long-term results at Dodge & Cox Stock
Vanguard Global Stock Index
This fund, which will open later this spring, has the makings of a good long-term global play. For starters, it will be tracking the FTSE All-World Index--which consists of approximately 2,800 mid-caps and large caps from four dozen countries--so it will provide exceptionally broad exposure to stocks around the globe. What's more, it's expected to have an expense ratio of 0.45%. That's 75 basis points (or hundredths of a percentage point) cheaper than the typical no-load world-stock offering, giving this fund a sizable and enduring advantage over its rivals. And those attractions, plus Vanguard's indexing prowess and overall commitment to fundholders, make us think that this fund has good long-term prospects. (ETF fans who share our optimism should note that Vanguard is also launching an exchange-traded version.)
William Samuel Rocco is a fund analyst with Morningstar.
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