Finding Foreign Funds that Fit
Our Premium Screener seeks out potential foreign large-blend picks.
Earlier this month, Morningstar retired the foreign-stock peer group and rolled out five new replacement categories that divide that rather large universe along valuation, growth, and capitalization measures.
Investors looking for international exposure will be able to use the new peer groups to assemble better-diversified portfolios and to pick foreign funds that are more in-line with their investing temperaments, as well as their goals and risk tolerance. The new categories will help investors get a better bead on performance, too, as star ratings and relative rankings will now reflect how a fund stacks up against those with similar orientations.
Even within these more-granular peer groups, however, plenty of differences persist. For example, not all foreign large-blend funds are created equal. Weighing in with more than $30 billion in assets, American Funds EuroPacific Growth Fund (AEPGX) (a Fund Analyst Pick in the category) is a titan in the peer group, and one with a tendency to sport above-average exposure to emerging markets. Sentinel International Equity Fund (SWRLX), meanwhile, has a slight value tilt, a comparatively svelte asset base of just $93 million and a management team with a willingness to make large sector plays on occasion.
Fortunately, the Premium Fund Screener is here to help you sift through the new peer groups and drill down to just those offerings that meet your criteria. For this week's screen, we'll focus on the foreign large-blend category, which is home to many of the funds that investors might use to anchor the international portions of their portfolios. We'll kick out pricey offerings as well as those with relatively green management teams. We'll insist on strong returns over a significant stretch of time and initial investment minimums that aren't out of reach for the average investor.
Through Oct. 16, 2003, a total of nine funds make the grade with our screen--including the two mentioned above. Analysis highlights for three others appear below.
Julius Baer International Equity (BJBIX)
This is a flexible, unconventional fund that owns many midsize companies and some small caps in addition to larger firms. Its managers are willing to make decisive changes in their sector and country stakes and to hold large cash positions. Their strategy balances growth and blend characteristics.
UMB Scout WorldWide
This fund tries to hold down risk by limiting the size of its individual stock holdings and its emerging-markets stake, and focusing on larger companies. But it often buys midsize firms, and its weightings can differ markedly from those of rivals or indexes.
Fidelity Overseas (FOSFX)
Consistency is the goal here. This fund keeps its sector and country weightings close to the MSCI EAFE Index's, and the manager sticks mostly to big-cap names. It has delivered decent returns over the long run.
Shannon Zimmerman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.