Though U.S. investors have had little reason to look abroad for opportunities lately, it’s prudent to keep some of your portfolio in foreign stocks. And if that prudence led you to invest in Brown Capital Management International Small Company (BCSVX), you are no doubt happy that you did. The fund boasts a five-year annualized return that beat its peers (funds that invest in growing small and midsize foreign firms), the MSCI ACWI ex USA index (a broad foreign-stock benchmark) and the S&P 500.
The fund has a unique approach: Four managers work together, picking apart prospective holdings, and everyone must agree on decisions to buy or sell. “We’re a team, and we think the outcome is better than when one person dominates,” says comanager Daniel Boston.
It’s all part of a deep, research-driven process. The managers want to find “exceptional growth companies” (EGCs), says Boston, with four qualities: solid revenue growth; a competitive, sustainable position in its industry; executives with a vision of the future and an ability to make it happen; and profitability to fuel and sustain earnings growth. The quintessential EGC, the managers like to say, “saves time, lives, money or headaches, or it provides an exceptional value proposition to customers.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Just over 40 stocks fit the bill these days. Many tilt toward e-commerce, electronic payments, smart logistics, cloud adoption and innovative health care solutions. “Those trends have driven the portfolio during COVID-19 because they were accelerated by the pandemic, not disrupted,” says Boston. German health care firms Evotec and Stratec and Canadian logistics software company Kinaxis are among the fund’s top holdings.
The companies must be small—defined as $500 million or less in revenues at the time of purchase. As long as the firms remain exceptional growth companies, they stay in the fund.
Shares in Argentinian e-commerce and digital-payment company MercadoLibre, for instance, with $3.3 billion in annual revenues, have been in the fund since 2015. In fact, the managers don’t sell that often. In the fund’s five-year history, they’ve sold only seven stocks outright.
-
IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRAAn IRA conversion can give you a leg-up in retirement with tax-free income. But proceed with caution.
-
2026 Social Security COLA Projection Dips After Inflation SlowsThis October, the SSA will determine the new cost-of-living-adjustment (COLA) by comparing the CPI-W data from July, August, and September of 2025 to the same data from 2024.
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
-
Fed Cuts Rates Again: What the Experts Are Saying
Federal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
-
Stock Market Today: Stocks Retreat Ahead of Nvidia EarningsMarkets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
-
Stock Market Today: Stocks Edge Higher With Nvidia Earnings in FocusNvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
-
Stock Market Today: Dow Hits New Record Closing HighThe Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
-
Stock Market Today: Stocks Pop After Powell's Jackson Hole SpeechFed Chair Powell's Jackson Hole speech struck a dovish tone which sent stocks soaring Friday.
