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Fund Spy

3 Struggling Foreign Large-Growth Funds That Should Bounce Back

Their recent woes don’t raise concerns.

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Value-oriented stocks and sectors outperformed significantly in 2016, not just in the United States but also in most international markets. Indeed, the typical fund in the foreign large-value Morningstar Category gained 3.3% for the year and the MSCI EAFE Value Index gained 5%, while the foreign large-growth category lost 2.1% and the MSCI EAFE Growth Index lost 3.0%. Of Morningstar’s six diversified foreign stock categories, only foreign small/mid-growth performed worse than foreign large-growth, losing 3.0%. (Foreign large-growth funds have gained a modest edge over their value counterparts in 2017 through March 20 but still substantially lag since the start of 2016.)

A couple of the Morningstar Medalists in the foreign large-growth category handled last year’s challenging conditions skillfully and posted solid gains.  Harding Loevner International Equity (HLMNX), with a Morningstar Analyst Rating of Silver, gained 5.0% as many of its technology and other holdings prospered, while Bronze-rated  JOHCM International Select (JOHAX) returned 4.9% as many of its basic-materials and other picks thrived.

Greg Carlson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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