Foreign Stocks & Emerging Markets

International Fund Follows in the Family Tradition

This new-ish international fund continues Grandeur Peak’s winning ways.

The prospectus for Grandeur Peak International Stalwarts (symbol GISOX, $15) lists three portfolio managers, but they’d be the first to tell you that their portfolio is the result of a much broader team effort. The boutique investment firm leans on a 25-analyst research team to generate stock ideas for its seven mutual funds (two are closed; three require new investors to purchase directly from the company). All of the funds have beaten their respective benchmarks since inception, with six of seven beating their bogeys by 2 percentage points per year or more, on average.

Launched in 2015, International Stalwarts and its sister fund, Global Stalwarts, are two of the youngest in Grandeur Peak’s lineup. They can also hold bigger companies than their siblings, which invest in small companies across the globe. The Stalwarts funds hold a mix of small companies and midsize firms that have outgrown Grandeur Peak’s other portfolios.

Emotional Rollercoaster

K8I-FUNDTRENDS_RANKINGS.a.indd

Getty Images

International Stalwarts invests nearly 86% of assets in overseas firms, with the remainder in U.S. stocks. Companies in the portfolio typically have a market capitalization (stock price times shares outstanding) of $1 billion to $10 billion, though the managers will stick with a firm if it grows bigger and they still like the stock. The team tilts the portfolio toward high-quality companies with increasing revenues, stable profit margins and healthy balance sheets. The goal is to find firms with sustainable competitive advantages, where executives can boost earnings by percentages in the low to mid teens over the next five years or more.

The fund managers will pay up for high quality and growth potential. Stocks in the portfolio trade at an average 19 times estimated earnings, compared with 17 times for similar funds. But the managers expect International Stalwarts to hold up better than its peers during market dips. In 2018, the fund surrendered 17.7%; peers lost 19.1%, on average.

Toward the end of 2018, the managers lightened their positions in stocks that had held up well during the fourth-quarter slide and added to faster-growing names in the portfolio that had fallen in price. One such stock: Software engineering firm EPAM, which fell 16% over the quarter. The shares have returned 50.4% so far in 2019.

Most Popular

Where's My Refund? How to Track Your Tax Refund Status
tax refunds

Where's My Refund? How to Track Your Tax Refund Status

If you're waiting for your tax refund, the IRS has an online tool that lets you track the status of your payment.
March 2, 2021
Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your stimulus checks.
February 19, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

T. Rowe Price Financial Services Banks on a Turnaround
Stock Market Today

T. Rowe Price Financial Services Banks on a Turnaround

This fund is a good way to bet on an economic rebound.
February 24, 2021
DSTL: A Value Fund With a Twist
Becoming an Investor

DSTL: A Value Fund With a Twist

The fund’s 51.3% return since its inception in 2018 has more than tripled that of traditional value funds.
February 24, 2021
2 Top-Tier T. Rowe Price Mutual Funds
mutual funds

2 Top-Tier T. Rowe Price Mutual Funds

T. Rowe Price's mutual funds typically stand out among their peers, but these two selections provide elite equity and bond exposure for this point in …
February 24, 2021
Earth-First Funds Are Soaring
Markets

Earth-First Funds Are Soaring

Funds with sustainability in mind are super popular these days; these six are ready to deliver returns.
February 24, 2021