The three co-managers of Marsico Global (MGLBX) -- Cory Gilchrist, Tom Marsico and Jim Gendelman -- combine a big-picture economic view with stock picking based on companies' fundamental attributes. Gilchrist thinks the world will have trouble generating robust economic growth if the U.S. consumer remains down-and-out. After all, the U.S. accounts for only 20% of the world's gross product but 30% of global consumption.
Marsico has been shifting the portfolio from companies that depend on rapid economic growth to businesses that are uniquely positioned to boost sales even in a sluggish global economy. For example, Global holds both MasterCard and Visa because credit cards are displacing cash around the world. Seed king Monsanto is also a large holding.
Like all Dodge & Cox funds, Dodge & Cox International Stock (DODFX) focuses on the long term, which it defines as a time horizon of three to five years out. But Diana Strandberg, one of International's nine co-managers, says the fund is also now drilling down to be sure that companies in the portfolio have the liquidity and financial strength to withstand at least three to nine more months of dysfunctional capital markets.
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One industry that scores well is Big Pharma -- Novartis, Sanofi-Aventis and GlaxoSmithKline are International's three largest holdings. Strandberg says the drug makers generate piles of cash, which can be used to boost dividends or buy back shares (or both).
We'd be lying if we said Rudolph-Riad Younes, of Artio International Equity II (JETAX), was a bull on the global economy. He's not. "This recession will last longer than people expect," says Younes, who manages the fund with Richard Pell. Younes thinks that profit margins worldwide were inflated, pumped up by the easy-money policy and credit bubble emanating from the U.S. So he's mostly on defense, seeking companies with stable earnings and a predictable dividend, such as Nestlé. He's also warming to commodities, including oil, which he now calculates as undervalued and a useful hedge against future inflation.
After years of sizzling performance, emerging-markets stocks were crushed in 2008 as panicked investors stampeded for the exits. Gonzalo Pangaro, who co-manages T. Rowe Price Emerging Markets Stock (PRMSX) with Chris Alderson, still thinks favorable demographics, urbanization and higher economic growth are structural trends that bode well for the developing world over the long run. The problem is the present situation: Robust growth cannot resume until the U.S and the global economy stabilize, Pangaro says.
So what does he like? Latin American countries such as Brazil and Mexico have learned from previous financial crises. That gives Pangaro more confidence in their ability to withstand banking, fiscal and foreign-currency challenges than, for instance, emerging nations in Eastern Europe. In Asia, the fund is leaning away from export-oriented economies, such as Taiwan and South Korea, and favoring the populous giants, China and India.
Commodity Funds
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