Our last update reviewed ideas about services that Jyske Global Asset Management offers for US subscribers. However the tactics that Jyske uses and their stock and bond list was worth of study by non US investors as well.
This update looks at a mutual fund that only non US investors can invest in.
However the portfolio and investing tactics of the fund are worth study by all investors, Americans included.
This fund is called the State Street Global Advantage Fund.
This fund tracks the market value analysis of Michael Keppler and invests mainly in the major markets that Keppler rates as top value (buy) .
Michael has been a friend for nearly 20 years and we keep track of global stock market value by following his analysis.
He compares each global stock market’s history. From this he develops his Good Value Global Stock Market Value Strategy. His analysis is rational, mathematical and does not worry about short ups and downs. In my opinion, he is one of the best market statisticians in the world. You can learn more about Keppler Asset Management in your June Major Market Value update.
State Street Global Advisors is the investment management arm of State Street Corporation (NYSE: STT),and it has been ranked No. 1 by a Pensions & Investments’ 2007 Money Managers Survey for seven years in a row.
This firm manages a whopping $1.8 trillion of institutional assets and they have investment centers in Boston, Hong Kong, London, Montreal, Munich, Paris, Singapore, Sydney, Toronto, Tokyo and Zurich, and offices in 27 cities worldwide including Luxembourg where they manage the two Global Advantage Funds…major and emerging market.
This fund is aimed at getting good value in the long term. See the fund details here gaf-mm-fact-sheet-2008-06-30-e
Notice how the fund has outperformed the Morgan Stanley Capital Index since its inception in 1993.
However we can also learn a lesson looking at the fund’s performance from 1998 to 2002. The fund underperformed the global index. The lesson is that no strategy works all the time.
In this case for four years (1998-2002) an investor would have been better off in a global index rather than the fund.
Every investor should keep this in mind and watch their personal time requirements when investing. Investors who invested in 1998 and needed money in 1999 would have lost (either in the fund or index) had they needed to liquidate.
But in 2001 they would have gained, but more in a the world index than the fund.
There is a second more subtle lesson here.
Value oriented funds will tend to have poorer short term performance in bear markets because they are buying good value. The same fund will tend to have the best return in the medium when that good value recovers and pays off!
Here is Keppler’s good value recommendation as of June 2008.
The Top Value Model Portfolio contains Belgium, France, Germany, Italy, the Netherlands, Spain and the United Kingdom at equal weights.
Here is the breakdown of the ten largest investments in the major market fund and the country where these shares are located:
Bearkshire Hathaway USA
This is Warren Buffet and team. here the fund managers have with good reason, departed from their good value theme as this is a US traded share and the USA market is rated as bad value by Keppler. Since Buffet is a value investor however this makes sense in the scheme of things.
Fortis is an Belgian-Dutch based international provider of banking and insurance services to personal, business and institutional customers.
Telefónica SA is the leading telecommunications operator in the Spanish and Portuguese-speaking world.
Grupo Santander (LSE: BNC, NYSE: STD, BMAD: SAN) is a banking group centered on Banco Santander, the largest bank in Spain, which originated in Santander, Cantabria, Spain. It is the second largest bank in Europe in terms of market capitalization (behind HSBC), and also has numerous operations in Latin America. It has rebranded most of the subsidiaries it has acquired to Santander.
ENi is an Italian integrated energy company, committed to growth in the activities of finding, producing, transporting, transforming andmarketing oil and gas.
Ing Group NV
This is a huge Dutch finance company.
French based, Total is the world’s fourth-largest oil and gas company and a world-class chemicals manufacturer.
Banco Bilbao Vizcaya Argentina
One of Spain’s top banks that also operates in 10 Latin American countries.
Unilever has British-Dutch history in brand foods, beverages, cleaning agents and personal care products. Unilever employs nearly 180,000 people worldwide.
This is a Rome-based, pan-European bank, with over 28 million customers and operations in 19 countries.
There you have it, State Street Global Advantage Fund, holding major European shares, each a multi currency investment in its own right.
This fund is a proven winner and investors can start with as little $8,000 (euro 5,000).
Keep in mind the managers (for protection from competition) are allowed to show the portfolio they had three months ago. The current portfolio may differ though this fund does not tend to trade a lot.
Americans cannot invest, but may want to invest in just some of these shares. Keep in mind the managers (for protection from competition) are allowed to show the portfolio they had three months ago.
Some non Americans may prefer this approach as well.
One way to do this is to find a local or London stock broker who can buy shares gloabally.
I have personally used Barrie Martin in London for more than a decade. He is at Smith & Williamson, an independent provider of investment management, accountancy, tax, corporate and financial advisory services to private clients.
They have 11 principal offices in the UK and Ireland, 1,500 people and an international capability in 97 countries. Their aim is to provide an innovative global service.
The down side of the Global Advantage Funds for non Americans is the initial sales fee.
At one time the managers of this fund waived or reduced the sales fee when readers came direct from me since I do not take any commissions. I have asked if this is still possible and will let you know.
I need your questions! Please let me know what am I not making clear.
No question is too small so please shoot away. I will not normally answer directly but will include my replies in your regular updates.
I am increasing the frequency of updates from every two weeks to two or three updates a week to help us take advantage of this transition. There is no charge for this of course.
PLEASE BE SURE TO PUT BL (Borrow Low) IN THE SUBJECT LINE OF YOUR EMAILS TO ME. This is a signal that your question gets priority. Send your questions to firstname.lastname@example.org
Learn more about multi currency investing. Join me and Jyske Bank.