Jason Stipp: Certainly one of the areas of uncertainty that has been on investors' minds lately is Europe. One of your funds, the International Growth Fund, according to our most recent Morningstar data, has about a 37-38% stake in U.K. and Western Europe. I wonder if you can comment a little bit about the valuations and the outlook for those stocks, given some of the events in Europe over the last few weeks. Has anything changed as far as your fundamental analysis on the names in that portfolio?
Sam Stewart: I wouldn't say anything has fundamentally changed. Obviously, the valuations are somewhat more attractive than they were.
That weighting is slightly less than the benchmark. And when you adjust for the fact that we've got a few energy companies in there that are really more plays on global commodities and some companies which have sizable businesses in the U.S., we're probably even a little more underweight Western Europe per se.
And I think we would have said six weeks ago, and we continue to say today that Europe has some serious headwinds, both in terms of the economy and as they have to work through the problems, particularly for the European consumer and stocks that play on the European consumer, as well as just the general demographic issues in Europe, which I think the Greek crisis which is largely a pension-related crisis is very reflective of.
The working population of Europe every day grows relatively smaller relative to the retired population. So maybe the Greek pensions are too big, and we can nitpick any particular problems, but the reality is fewer and fewer workers are behind each retiree in Europe. It's not a great situation for economic prosperity, and that's why we continue to be somewhat cautious.
Stipp: Would you say, Sam, that the smaller-cap stocks in Europe could be facing even heavier headwinds because they're more likely to have business that's dependent on the European continent, versus maybe a larger multinational European company?
Stewart: Well, it depends. So you've got Abcam, for example, as a company in our portfolio based in the U.K., and they are involved in selling biologic chemicals, if you will. I know that's not the right terminology, but products used in biotech research, and their markets are heavily in the U.S.
So they're an example of a company that's not going to be too affected. Now, on the other hand if you have a retailer, Bijou for example, would be a retailer that is pretty much European centric, and they're apt to suffer much more than somebody like Abcam. So it really depends company by company.
The other thing to think about is that a cheaper euro is going to make any European export company more competitive.
So it's not as though all European companies are going to hell in a handcart. The consumer facing companies definitely have a struggle, but even small companies, or export oriented, probably will be doing better than they have been doing.