Select your local site for products and services by region

Americas
Latin America
United States
United States Offshore
Asia Pacific
Australia
Hong Kong
Japan
Singapore
Europe
Austria
France
Germany
Italy
Spain
United Kingdom
Location not listed?
International
Fixed income
Active fixed income investments uncover yield and value opportunities while mitigating risk. Tap into Natixis Investment Managers’ expertise.
September 18, 2024
Portfolio analysis & consulting
In-depth portfolio analysis to identify and measure sources and drivers of risk and return that can be applied to asset allocation in client portfolios.
October 09, 2024
Where does fixed income go from here?
Three veteran fixed income managers answer questions on investors’ minds, especially after the Fed’s interest rate cut.
Tools of the Trade
Tap into insights, portfolio analysis techniques, and educational tools to explore trends, navigate rapidly changing markets, and uncover opportunities.
Diversity, inclusion, and belonging
We continually work to create an environment that promotes diversity, inclusion, and belonging in all its forms, across gender, race, religion, sexual orientation, disability, ethnicity and background.
Equities

International value investing: Why it pays to be patient

November 18, 2024 - 3 min read

Eric Liu, CFA®, Portfolio Manager, Harris | Oakmark, shares his optimistic outlook for international equities and why investors are often rewarded for their patience. Hear more about:

  • Why their objective as an international value investor is to find and buy high-quality companies that they think are trading at a discount to their estimate of intrinsic value. This makes them contrarian investors and means there can be times when they are underperforming.
  • How they don't manage the portfolios to a benchmark, so the return pattern can look very different over the short term, but can lead to favorable long-term results.
  • Why, over the past year, they’ve invested in certain geographies that have underperformed the global equity markets. France, for example, has underperformed because of slower GDP growth and political elections, but they believe several companies there are attractive from a valuation and quality perspective.
  • Why they own select stocks, such as agriculture, and where they believe there's an opportunity for time arbitrage, meaning their time horizon is longer than the market and are willing to wait through a weak cyclical area.
  • The valuation of the Oakmark International Fund is trading at a PE ratio of under 10 times and is returning a significant amount of cash back to shareholders. In fact, the total yield of the portfolio is over 5%.
  • Today, the portfolio is trading at a 50% discount to intrinsic value, or $0.50 on the dollar. Historically, when the portfolio has reached these attractive valuation levels, prospective returns have been quite strong.

The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of September 26, 2024, and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

The specific securities identified and described in this report do not represent all the securities purchased, sold, or recommended to advisory clients. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time one receives this report or that securities sold have not been repurchased. It should not be assumed that any of the securities, transactions, or holdings discussed herein were or will prove to be profitable.

The price to earnings ratio (“P/E”) compares a company's current share price to its per-share earnings. It may also be known as the "price multiple" or "earnings multiple", and gives a general indication of how expensive or cheap a stock is. Investors should not base investment decisions on any single attribute or characteristic data point.

The MSCI World ex USA Index (Net) is a free float-adjusted, market capitalization-weighted index that is designed to measure international developed market equity performance, excluding the US. The index covers approximately 85% of the free float-adjusted market capitalization in each country. This benchmark calculates reinvested dividends net of withholding taxes. This index is unmanaged and investors cannot invest directly in this index.

The MSCI EAFE Index (Net) is designed to represent the performance of large and mid-cap securities across 21 Developed Markets countries in Europe, Australasia and the Far East, excluding the US and Canada. The Index covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries. This benchmark calculates reinvested dividends net of withholding taxes. This index is unmanaged and investors cannot invest directly in this index.

The S&P 500® Index is a float-adjusted, capitalization-weighted index of 500 US large-capitalization stocks representing all major industries. It is a widely recognized index of broad, US equity market performance. Returns reflect the reinvestment of dividends. This index is unmanaged and investors cannot invest directly in this index.

Past performance is no guarantee of future results. The performance data quoted represents past performance. All returns reflect the reinvestment of dividends and capital gains and the deduction of transaction costs. Current performance may be lower or higher than the performance data quoted. The investment return and principal value vary so that an investor's shares when redeemed may be worth more or less than their original cost. To obtain most recent month-end performance data visit oakmark.com.

Portfolio holdings are subject to change without notice and are not intended as recommendations of individual stocks.

Before investing in any Oakmark Fund, you should carefully consider the Fund's investment objectives, risks, management fees and other expenses. This and other important information is contained in a Fund's prospectus and summary prospectus. Please read the prospectus and summary prospectus carefully before investing. For more information, please visit oakmark.com or call 1-800-OAKMARK (625-6275).

Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.

Investing in foreign securities presents risks that in some ways may be greater than in US investments. Those risks include: currency fluctuation; different regulation, accounting standards, trading practices and levels of available information; generally higher transaction costs; and political risks.

The Oakmark International Fund’s portfolio tends to be invested in a relatively small number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. Although that strategy has the potential to generate attractive returns over time, it also increases the Fund’s volatility.

The Oakmark Funds are distributed by Harris Associates Securities L.P., member FINRA.

Natixis Distribution, LLC (Member FINRA | SIPC), a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers, is a marketing agent for the Oakmark Funds.

7277106.1.1