The U.S. stock market meandered through the past year, ending this May less than 3% ahead of the same date in 2022. The Japanese market, however, returned more than 15%. Even the war-troubled European market returned nearly 5%.
Global blend funds invest the world over, in both bargain-price stocks and faster-growing fare. The category has lagged the U.S. market recently, but some top-performing funds have maneuvered smartly through geopolitical challenges such as COVID and trade tensions.
The Jensen Global Quality Growth Fund (JGQSX) notched a 5% return in the year ending May 31, putting it in the top 10% of its category, according to research firm Morningstar. As the fund's name suggests, the managers are focused on two main factors: strong growth prospects and healthy finances, demonstrated by competitive advantages and good cash flows, says Allen Bond, a co-manager of the fund and head of research for Jensen.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
Managers look for proven gems
The managers start by screening for companies that have achieved a return on equity (a measure of profitability) of at least 15% for the past 10 years, which generally limits them to large, well-established companies.
"We are not trying to find hidden gems that have yet to prove themselves as viable businesses," Bond says. Then, they zero in on companies with strong growth in free cash flow (cash left over after operating expenses and spending on assets such as buildings and equipment). Because of the focus on quality and growth, the average price-earnings ratio for fund holdings was about 23 recently, compared with a P/E of 19 for the S&P 500 Index. The concentrated portfolio held only 35 stocks at last report.
The fund's top holding is Dow stock Microsoft (MSFT), which gets about half of its revenue outside the U.S. Bond is bullish on the company's growing cloud-computing services. He also likes AstraZeneca (AZN), the European pharmaceutical giant, with some cancer and diabetes drugs in the pipeline that could boost sales.
The fund aims to make international stocks about 40% of its portfolio. Among its domestically focused holdings is blue chip stock UnitedHealth Group (UNH), which should benefit from higher demand for healthcare as the nation ages, says Bond.
The fund charges expenses of 1.25% annually, slightly above average for its category.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
-
These Stocks Dipped in 2025. Do They Have Value?If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy InvestingInvesting in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Stock Market Winners and Losers of the 'Big, Beautiful' BillDefense, manufacturing and tech should prosper, while health care and green energy stocks face hurdles.
-
With Buffett Retiring, Should You Invest in a Berkshire Copycat?Warren Buffett will step down at the end of this year. Should you explore one of a handful of Berkshire Hathaway clones or copycat funds?
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market TodayThe lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
-
S&P 500 Sees New Highs on Shutdown Day: Stock Market TodayMost of its components were in the red, but the S&P 500 Index still managed to hit a new intraday all-time high.
-
Are Preferred Stocks Right For You?Preferred shares have attributes of both stocks and bonds – and income investors will like their generous dividend yields.
-
Playing Defense Pays Off for Our Favorite Junk Bond FundDefensive sectors weathered the April selloff well, which helped the Vanguard High-Yield Corporate outpace its peers.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
