This global fund is rated five stars by Morningstar.
Tweedy Browne Global Value (TBGVX)
from Bob Carlson’s Retirement Watch
I recommend adding Tweedy Browne Global Value (TBGVX), a global stock fund that should benefit if the European Central Bank and other global central banks continue their recent expansive monetary policies.
The management team has shown for decades that its deep value stock selection system delivers solid results in many types of markets. It has low turnover. Management concentrates on its best ideas, holding only 95 stocks and having about 29% of the fund in the ten largest holdings, though a stock rarely is 5% or more of the fund. The team isn’t wedded to any sector of the globe, investing in individual companies it likes regardless of their base.
Companies must meet strict standards. When there aren’t enough stocks to buy, the fund will let cash build until it finds companies it wants to own. Recently about 20% of the fund was in cash.
Top holdings recently were Standard Chartered, Novartis, Roche, Safran, and Total. The top sectors were financial services, consumer defensive, industrials, and health care.
Regionally, 55% of the fund is in developed Europe, 24% in the U.K., almost 8% in Asia, and 14% in the Americas. Only 2% recently was in emerging markets.
Historically, the emerging markets allocation has been low. It’s important now that the fund hedges all its currency exposure back to the dollar. In a time of a strong dollar, which we’ve had for a while and I expect to continue, an international and global fund could select stocks that perform well in their local currencies but give up a significant portion of their gains when converting to the dollar. These days the currency hedging is important to a U.S. investor.
The fund was one of the top performers in its Morningstar category in the last year, primarily because of the edge from its currency hedging. It returned over 4% while most in the category lost money. It returned 2.54% in the last month and 2.19% so far in 2015.
Bob C. Carlson, Bob Carlson’s Retirement Watch, www.retirementwatch.com, March 2015