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Is Something Wrong With Oakmark International?

We're not worried that this Gold-rated, high-conviction, value-oriented fund is landing near the bottom of its category this year.

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Oakmark International is bringing up the rear of the foreign large-blend Morningstar Category this year, with a 9% loss year to date. But with topnotch management and a distinctive approach, we're reaffirming the fund's Morningstar Analyst Rating of Gold.

David Herro, the fund's high-conviction, value-oriented manager, has proved himself through multiple market cycles and is backed by a deep, experienced team. That experience is key for implementing the fund's contrarian, long-term-focused approach.

This fund buys stocks at steep discounts to the team's estimates of underlying business values. This often involves investing in the midst of fearsome news or macroeconomic events, such as buying Japanese shares after 2011's catastrophic earthquake and tsunami; buying U.K. stocks after the 2016 Brexit vote; or holding European automakers and financials amid global trade war fears in 2018. 

These aren't macro-driven moves, though. Herro and his team are inveterate, bottom-up investors who spend a lot of time traveling and studying business models and balance sheets, building an approved list of companies they'd like to own and then waiting for their share prices to diverge from their issuers' intrinsic values.

The result is a portfolio that can often look out of step with peers and benchmarks, as it does this year.

Morningstar.com does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.