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Fund Spy: Morningstar Medalist Edition

A Tour of Our World-Stock Fund Ratings

How do Oakmark, Artisan, and Invesco funds shake out?

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Let's take a look at our world-stock ratings to illustrate how we draw the line from Gold to Silver and on down the line.

Gold-rated  Dodge & Cox Global Stock (DODWX) exemplifies the good fundamentals we seek in our forward-looking ratings. It has skilled, stable management, a sound strategy, great stewardship, and low costs. The fund pulls from all its global research to build a fund similar but not identical to what you'd get if you bought  Dodge & Cox Stock (DODGX) and  Dodge & Cox International Stock (DODFX) separately. Those two other funds have strong long-term performance over a much longer time period than this fund has been around. It makes for a dependable core holding.

Gold-rated  Oakmark Global (OAKGX) is for investors willing to accept a little more risk for a little more return potential than Dodge & Cox Global Stock. Oakmark has just 40 holdings to Dodge & Cox's 97 and has 39% of assets in its top 10 names to 23% for Dodge. Clyde McGregor and Rob Taylor seek out companies trading at a steep discount to their intrinsic values, but in their case, this leads to an unusual mix of value and growth stocks. This fund is more middling on the Price and Parent points, but it boasts strong performance and excellent management to make it worthy of Gold.

 Artisan Global Value (ARTGX) has great managers, a sound strategy, and good performance to boot. So, what makes it a Silver rather than a Gold? Fees. The fund charges 1.50% compared with 1.16% for Oakmark Global and 0.65% for Dodge & Cox Global Stock. If Artisan would only offer shareholders a fair deal, this fund likely would merit a Gold rating.  Artisan International Value (ARTKX) has the same managers and a 1.17% expense ratio, and we rate that one Gold. Unfortunately, it’s closed to new investors.

 Tweedy, Browne Value (TWEBX) is also held back by expenses. This Silver-rated fund charges 1.40% but has stable management and otherwise good stewardship. The firm has long held ties with Warren Buffett, and it practices a more diffuse version of Buffett’s strategy. The managers are patient investors who will pay a fair price for a good company with a good moat. The fund’s five-year returns are strong. Although the 10- and 15-year returns are not, that is due to the fact that the fund has shifted from a mostly U.S. fund with a slug of foreign names to a world-stock fund with equal amounts in U.S. and foreign names. Even excluding that factor, though, it’s a strategy that has enough ups and downs that it requires a lot of patience from shareholders.

 Perkins Global Value (JGVAX) is rated Bronze because it has good ingredients but is much less proven than the above funds. It had been Janus Global Value, but then in 2010, manager Greg Kolb moved from Janus to Perkins, where his value leanings are a better fit. Kolb has been a comanager on the fund since 2005 and a lead since 2009. In sum, we don’t have a lot of data on the fund in its current guise, though it is promising. To boost this fund, Perkins added two foreign analysts alongside its 16-member domestic team.

 Janus Global Select (JORNX) is rated Neutral because it is even less proven than Perkins Global Value. George Maris, who took over last August, has to prove himself here. In the past, he has run rather diffuse portfolios, so it will be interesting to see if he can succeed in a more concentrated format.

 Invesco Global Core Equity (AWSAX) earns a Negative rating for being consistently weak. It has under­performed in each of the four full calendar years since the management team took over in 2008. The fund follows a quantitative value strategy that has fallen for too many value traps over the years such as  Best Buy (BBY). It’s a real challenge for quant value strategies because they are looking at past data and trying to find cheap stocks. Sometimes you get companies due for a rebound and sometimes you get value traps.

For a list of the open-end funds we cover,  click here.
For a list of the closed-end funds we cover,  click here.
For a list of the exchange-traded funds we cover,  click here.
For information on the Morningstar Analyst Ratings, click here.

Russel Kinnel has a position in the following securities mentioned above: DODFX, ARTGX. Find out about Morningstar’s editorial policies.