Morningstar Advisor - April/May 2011 - (Page 68)
Screens
Foreign Funds That Win at Concentration
By Karin Anderson
Use this screen to find focused funds with stellar risk/reward profiles.
Foreign equity funds don’t tend to be as concentrated as their domestic counterparts. To illustrate, the median number of holdings for foreign large-cap funds clocked in at 115, which amounted to 51% more stocks than are typically found in a domestic-stock fund. As far as foreign core funds go, it’s fair to say that even those with 50 to 70 holdings are on the concentrated side. Although such funds aren’t spreading risk across hundreds of tiny positions, that does not mean they are doomed to deliver a bumpier ride. This Morningstar Principia screen reveals some successful concentrated funds that have kept a lid on risk with a combination of
in-depth stock research, deft security selection, and valuation discipline.
Special Criteria And ( Morningstar category Or Or And And And And Morningstar category Morningstar categroy Total No. of Holdings Purchase Contraints Min. Initial Purchase Analysis 5 Distinct Portfolios Only 5 Foreign Large Value 5 Foreign Large Blend 5 Foreign Large Growth < 80 5 Closed–New Investment / < 25,000 5 NA / )
And And
Manager Tenure % Rank Cat 10 Yr
> 10 < 25
To start, cast the net for all foreign large-cap funds that have 80 holdings or fewer. Then narrow the field to funds that are open to new investments of $25,000 or less and are followed by Morningstar analysts.
Next, make sure at least one of the managers has been running the fund for 10 years or more. (In addition to helping find proven managers, this helps ensure that the core strategy has been consistent.) And set the screen to pull funds that have landed in the top quartile of their respective categories during the past 10 years.
And ( Morningstar Risk And And Morningstar Risk Morningstar Risk
5 Average 5 Below Average 5 Low )
68 Morningstar Advisor April/May 2011
Table of Contents for the Digital Edition of Morningstar Advisor - April/May 2011
Morningstar Advisor - April/May 2011
Contents
Contributors
Letter From the Editor
The Debate That Matters Most
What Can the Mutual Fund Industry Do Better?
Cool Logic, Warm Intent
How to Start a Mutual Fund
Owner and Operator
Middle East Revolts Roil Oil Markets
Four Picks for the Present
Investment Briefs
How We Improve Our Odds of Picking Outperformers
Health Care Survived 2010, but Investors Want Proof
The Global Fund-Leadership Playoffs: Europe vs. the United States
U.S. Fund Investors Have It Good
U.S. Fund Firms Learn to Speak UCITS
Balancing Act
The Tamer Ride
Investors Lend a Hand
Healthy, Wealthy, and Wide
Foreign Funds That Win at Concentration
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
VAs Finish 2010 With a Solid Gain
Buying Good Funds, Poorly
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