The Broader Lessons of Tweedy, Browne Global Value's Revival
Why a prominent fund lagged, and why patience was called for.
Five years ago, Tweedy, Browne Global Value (TBGVX) was a tough sell. Although it had posted healthy gains as stocks rose around the world, it hadn't kept up with its peers. In fact, through 2007, it had endured five consecutive years in the bottom half of its category (at the time, foreign small/mid-value). In four of those years, this all-cap portfolio had also trailed the foreign large-value category average. Then it struggled in the first quarter of 2008 as well.
But it would have been unwise to give up on the fund at that point. Its managers had built an estimable record prior to that period. Furthermore, their strategy had been laid out clearly, adhered to consistently, and had a logical underpinning. In addition, there were mitigating circumstances for the fund's underperformance relative to its peers. In other words, a close look at the fund might have led one to expect what subsequently occurred: a long stretch of outperformance.
Gregg Wolper does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.