Inflows have picked up lately along with performance at tried-and-true Artisan International, but we think it remains a good pick for the long haul.
Greg Carlson: Morningstar's Medalist of the Week is Artisan International (ARTIX). This fund lands in Morningstar's foreign large-growth category. However, it's more diversified by company type than that name might imply. True, it does own a fair number of rapid-growing companies that can command a high valuation as well as a number of more stable-growth companies. But it will also venture into some value plays. In fact, the fund has occasionally landed in Morningstar's foreign large-blend category.
The team will own a mix of companies, as I said. I think that's typified by the top two holdings. You've got Baidu--a very hot play--an Internet-search firm in China, basically the Google of China. And then the second holding is a much more steady company--that's Bayer, the German drugmaker.
One of the main attractions here is the lead manager, Mark Yockey. He's run the fund since its 1995 inception. And he has employed the same strategy for a total of about 25 years, as he previously ran a fund for Waddell & Reed for six years.
The fund tends to just barely keep up in downturns and outperform in big rallies--not only in the late 90s but also more recently in 2012 and 2013 when the fund landed in the category's top decile. Now, it will occasionally break from that pattern: In 2010, an ill-fated move in the European banks hurt, in a good year for stocks. 2011 was a weak year for foreign stocks, but the fund did well through some savvy picks in emerging markets.
Inflows have picked up lately along with performance, so the team now runs about $28 billion of the strategy. While the team hasn't given us a hard number on capacity, we wouldn't be surprised to see [the fund] close to new investors sooner rather than later. However, it remains a good pick for the long haul.
