Advertisement
investing

Artisan Developing World Heads Off Emerging Challenges

A stake in multinationals buoys this fund when developing markets sink.

A few months short of its fifth birthday, Artisan De­veloping World (symbol ARTYX) is youthful by mutual fund standards. But before taking the helm, manager Lewis Kaufman spent a decade managing foreign-stock strategies at Thornburg Investment Management, including roughly five years running a diversified emerging-markets stock fund (also called Developing World) whose annualized returns dazzled.

So far, so good for version 2.0: Since its 2015 inception, Artisan Developing World has posted an 11.6% annualized return—ahead of the MSCI index’s 6.2% return and the 5.5% average gain among peer funds. (Returns are through January 31.)

Advertisement - Article continues below

Like many emerging-markets funds, Developing World has a big bet on China. The fund dedicates 35% of assets to Chinese stocks (compared with 34% in the MSCI Emerging Markets index), favoring firms that will benefit from the country’s productive economy and expand alongside China’s growing skilled labor force and middle class.

But an outsize bet on China has been bad news for emerging-markets funds this year. Investors are worried about the coronavirus and its impact on businesses and the economy in China, as well as ripple effects in the region. So far in 2020, emerging-markets funds are down an average 4.2%.

The Kiplinger Letter
Kiplinger's Personal Finance

Getty Images

But Developing World returned 0.5% over the same period, cushioned in part by its investments in developed-country multinational firms. Firms such as Visa (V), which hopes to capitalize on a global shift to cashless payments, and Netflix (NFLX), with a subscriber base now more than half non-American, benefit from positive trends in emerging markets but tend to hold up better when emerging-markets stocks hit the skids. Kaufman says the outbreak is likely a short-term problem for Chinese businesses, and that the government has shown a quicker and more thorough response than it did with SARS.

The rest of the portfolio is invested in such markets as Latin America and Southeast Asia. Kaufman doesn’t expect these economies to expand rapidly, so he hunts for firms that provide a product or service in high demand in an underserved market. MercadoLibre (MELI), an e-commerce and mobile payments business in Latin America, is a top holding.

Advertisement
Advertisement

Most Popular

Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 10, 2020
What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much could it save you?
September 17, 2020

Recommended

10 of the Best Target-Date Fund Families
mutual funds

10 of the Best Target-Date Fund Families

The best target-date funds are a 'set it and forget it' approach to your retirement, but which fund family should you trust your money?
September 17, 2020
Best Bond Funds for Every Need
Investing for Income

Best Bond Funds for Every Need

In a changing market, it’s important to remember why we hold bonds in the first place.
September 15, 2020
How to Build a Bond Portfolio
Becoming an Investor

How to Build a Bond Portfolio

No single bond (or even bond fund) can do it all. We'll help you match your goals with appropriate fixed-income picks.
August 27, 2020
Time to Buy Japanese Shares?
Foreign Stocks & Emerging Markets

Time to Buy Japanese Shares?

In a weak global economy, T. Rowe Price Japan finds firms with healthy balance sheets.
August 27, 2020