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Value Line’s Global Equity objective group consists of mutual funds that can own stocks from any country in the world. This is very different from the foreign objective, in that global funds can own U.S. stocks while foreign funds specifically cannot. This is an important distinction about which investors using an asset allocation model should be aware, as the domestic component of a global fund can throw off certain allocations if the fund’s portfolio isn’t properly accounted for in the larger asset allocation plan.

Still, for some investors who are seeking international exposure but that are concerned about the risks of owning a fund that invests exclusively in foreign stocks, a global fund might work very well. The problem, however, is that many of these funds place a significant amount of their portfolios in U.S. stocks. This can make their portfolios very close in nature to growth funds that are allowed to invest in foreign markets. Thus, it is important to review a global fund’s holdings carefully to see if it is a good fit. Moreover, it might make sense to compare a final list of candidates from this objective group against more broadly invested growth funds.

Funds in the global objective group are, by design, generally well diversified. In fact, some funds in this group actually use the word “world” in their names to express just how broad their investment mandate is. Despite that broad mandate on the country front, many here take specific investment approaches, such as focusing on small cap companies, dividend paying companies, or growth and value investment styles. There are also a number of funds here that are designed to be the sole stock offering in a portfolio. 

Over the long term, the Global Equity objective group has been a good performer relative to the broader market, as measured by MSCI WORLD Index. For the 10-year period ended July 31, 2013, the group had an annualized gain of 8.1%, while the MSCI WORLD Index reported an annualized gain of 6.1%. Over the trailing five and three year periods, the group had a gain of 4.8% and 12.0%, respectively, while the Index reported a gain of 2.0% and 10.3%, respectively. During the one-year period ended July 31, 2013, the Global Equity objective group reported a gain of 22.4%, compared to a gain of 20.6% for the MSCI WORLD Index. The group has an average Risk Rank of 3, indicating that funds in this group might appeal to many investors, who would only need to accept an average level of risk.


Fund Name: Oppenheimer Global Value Fund A
Ticker: GLVAX
Investment Advisor: OppenheimerFunds, Inc.
Year-to-Date Return: 24.45%
Benchmark: Morgan Stanley Capital International (MSCI) World Index
Objective: The Fund seeks capital appreciation.
Investment Strategy:
• Invests mainly in common stocks of US and foreign companies that the manager believes are undervalued.
• Can invest without limit in foreign securities of any country, including countries with developed or emerging markets.
• Invests a substantial portion of its assets in issuers in a number of different foreign countries.


Fund Name: Ivy Cundill Global Value Fund A
Ticker: ICDAX
Investment Advisor: Ivy Investment Management Company (IICO)
Year-to-Date Return: 22.00%
Benchmark: MSCI World Index / Lipper Global Multi-Cap Value
Objective: The Fund seeks to provide capital appreciation.
Investment Strategies:
• Invests primarily in equity of issuers located throughout the world, including emerging market counties.
• May invest up to 100% of its total assets in foreign securities.
• May invest up to 20% of its total assets in “distressed debt”, which are fixed income non-investment grade securities of distressed issuers.
• Typically holds a limited number of stocks.
• Invests at least 40% of its total assets in securities of non-US issuers.


Fund Name: Columbia Marsico Global Fund A
Ticker: COGAX
Investment Advisor: Columbia Management Investment Advisers, LLC
Year-to-Date Return: 19.48%
Benchmark: MSCI All Country World Index
Objective: The Fund seeks long-term growth of capital.
Investment Strategies:
• Invests significantly (generally, at least 40% of its net assets) in the securities of companies organized of located outside the United States or doing business outside of the United States.
• Invests in common stocks and may invest in companies of any size throughout the world that are selected for their long-term growth potential.
• Invests in companies form at least three different countries, including the United States, and may invest in companies operating in or economically tied to emerging market countries.
• May invest without limit in foreign securities.
• May invest in derivatives, including futures, forward contracts on foreign currencies, options and other derivative instruments.

In the table below, we have listed 10 top-performing funds through July 31, 2013 that we follow in our Fund Advisor database.

10 Top Global Equity Funds Performance

Fund Name

Ticker

% Year-to-date

Total Return

% 1 Month

Total

Return

% 3

Month

Total

Return

% 6 Month

Total

Return

% 5 Year

Total

Return

Annualized

Kinetics Small Cap Opportunity Adv  Fund A

KSOAX

34.19

4.69

8.73

22.21

8.80

Kinetics Market Opportunities Adv Fund A

KMKAX

27.42

4.34

4.84

 

16.25

8.53

 

Oppenheimer Global Value Fund A

GLVAX

24.45

7.58

9.61

15.68

13.28

AllianzGI Global Small-Cap Fund A

RGSAX

22.55

7.13

7.32

15.83

8.83

Ivy Cundill Global Value Fund A

ICDAX

22.00

5.40

7.24

16.35

6.88

American Funds New Economy Fund A

ANEFX

22.05

6.44

7.13

14.71

10.32

Marsico Global Fund

MGLBX

21.11

4.71

7.03

15.23

7.10

Polaris Global Value Fund

PGVFX

20.68

5.57

5.88

14.02

7.72

Columbia Marsico Global Fund A

COGAX

19.35

5.53

9.74

14.38

10.24

Oppenheimer Global Opportunities Fund A

OPGIX

19.35

5.53

9.74

14.38

9.88

Global Equity Objective Group

 

12.57

4.84

3.06

7.70

4.79

 

 

At the time of this article's writing, the authors did not have positions in any of the funds mentioned.