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Davis Global Is Aggressive but Not Irresponsible

Alec Lucas, Ph.D.

Alec Lucas: Bronze-rated Davis Global's risks have to come the fore of late, but the fund remains a promising long-term option. The fund is aggressive but not irresponsible. Veteran manager Danton Goei builds a benchmark-agnostic portfolio of about 50 stocks that combines steadier names, like Berkshire Hathaway with firms spending cash flow almost as fast as they generate it to grow their businesses, such as Amazon.com and China's ride-hailing service Didi Chuxing, a private and more illiquid holding. 

Goei's willingness to invest in private companies and overweight Chinese stocks differentiate this fund from itself typical world large-stock Morningstar Category peer. Many of the Chinese stocks that helped the fund to a top-decile, calendar-year finish in 2017 have contributed to its bottom-decile, year-to-date showing in 2018. Throughout his career, Goei has shown good judgment overall in adding to positions on weakness and that's helped the fund rebound from past disappointments, such as underperformance during the 2015-16 correction. Fundholders, though, must have a stomach for volatility to benefit here.