5 Top Foreign Large-Cap Morningstar Medalists
Tracking Morningstar Analyst Ratings.
Foreign large-growth, -blend, and -value funds are cornerstones of many investors’ portfolios, and they posted robust gains in 2017. Thus, it makes sense to review how five prominent Morningstar Medalists in these categories have fared since they earned their current Morningstar Analyst Ratings.
American Funds Europacific Growth A (AEPGX) has maintained a Morningstar Analyst Rating of Gold since November 2011 (when we began rating funds). The fund is in the hands of an experienced and skilled team of nine portfolio managers who run their own sleeves of the portfolio independently using their own individual strategies. The individual strategies are sound and complement each other nicely. The fund's 30.7% gain in 2017 was roughly the same amount as the typical foreign large-value fund, but it outpaced the MSCI ACWI ex US Index's 27.2%, and it has outpaced both since its initial rating while suffering relatively modest volatility.
Artisan International Value (ARTKX) has earned a Gold rating since November 2011. Managers David Samra and Dan O’Keefe use the same strict discipline at this closed foreign large-blend fund as they do at Silver-rated Artisan Global Value (ARTGX) (which is open to new investors). Their discipline consistently leads to atypical country and sector weights and focuses on 40 to 50 names, so this fund can lag at times. But Samra and O’Keefe have executed this approach very well over time. Indeed, this fund has handily outpaced its average peer and the MSCI EAFE Index since its initial rating as well as over the trailing 10- and 15-year periods.
Dodge & Cox International Stock (DODFX) is another fund that has maintained a Gold rating since November 2011 and is closed to new investors. It’s run by one of the most sizable, seasoned, and stable teams around. The team relies on the same decisive value-oriented strategy as it does at Gold-rated Dodge & Cox Global Stock (DODWX) (which is open to new investors). The strategy can lead to rough spells because the team is comfortable with atypical country and sector positions and is quite patient, but it has paid off nicely over time. This fund has comfortably outgained its typical foreign large-blend rival and the MSCI EAFE Index since November 2011, in fact, as well as over longer stretches.
T. Rowe Price Overseas Stock (TROSX) started off with a Neutral rating in January 2012. We gained confidence in this foreign large-blend fund over the next couple of years, and its rating rose to Bronze in December 2013. It has outpaced its average peer and the MSCI EAFI Index by fairly modest margins since the upgrade while incurring less volatility than both. Manager Ray Mills, who has good credentials and a strong support team, employs a wide-ranging approach, and the fund has solid returns over his 11-year tenure.
Vanguard International Value (VTRIX) has maintained a Bronze rating since November 2011. It has been a solid performer since then, posting an annualized gain of 8.7% through year-end 2017 versus 7.9% for the average foreign large-value offering and 8.1% for the MSCI ACWI ex USA Index. Vanguard has never been shy about making subadvisor changes at its multimanager funds, and it has made a few here during the period. The three current subadvisors, who were hired between 2008 and 2012 and have run the portfolio on their own since early 2013, are good. They employ sound and complementary strategies. And through year-end 2017 the fund had posted a 7% annualized return on their watch versus 6.6% for its average peer and index. The fund has been more volatile than its typical rival and the benchmark during that span, though.
William Samuel Rocco has a position in the following securities mentioned above: DODFX. Find out about Morningstar’s editorial policies.