Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
Breadcrumb
  1. Home
  2. Print
June 09, 1997 01:00 AM

INTERNATIONAL MEDIAN TOPS EAFE

Paul G. Barr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The median international equity manager in Pensions & Investments' Performance Evaluation Report handily outperformed the EAFE benchmark for the one-year period ended March 31.

    The median international equity manager returned 8.4% in the period, while the Morgan Stanley Capital International Europe Australasia Far East Index returned 1.8%.

    For longer and shorter periods, the median international equity manager in the PIPER database also outperformed EAFE.

    For the three- and five-year periods ended March 31, the median manager returned 8.7% and 12.2% respectively, and for the quarter returned 0.7%. (All returns for greater than one year are annualized, while all time periods are as of March 31).

    EAFE, meanwhile, returned 6.8% for the three years and 10.9% for the five years, and lost 1.5% in the first quarter.

    But much of the EAFE's lagging returns can be attributed to Japan's sagging equity market, which comprises a big portion of the widely used index. The Financial Times Actuaries Japan Index was down 26.1% in the 12-month period, while every Japan-only equity manager in the PIPER database was negative for the period, with returns ranging from -8.4% to -19.6%.

    Indeed, some of the top-performing managers in the period have kept their Japan allocation to a minimum, either by a specific decision or as a result of their stock-picking process.

    Hake Capital Management, a small-capitalization international manager based in Scottsdale, Ariz., reported the best performing return in PIPER's international fund universe for the year ended March 31. (That universe covers both separate account and commingled fund managers).

    Hake was up 32.1% in the period, and also led the universe for the quarter with a return of 9.6%.

    Mark Hake, president, said the firm looks for stocks selling below book value, but with a book value that's solid and substantial, which can be an issue when dealing with the world's differing accounting standards.

    One Thailand-based company in which Hake invested, Mutual Fund Public Co. Ltd., is an example of that. Mr. Hake said Thailand is in the midst of a major bear market for stocks, which has severely depressed the stock price of Mutual Fund Public, which has the largest share of the Thai mutual fund market.

    As a result, the stock is "an incredible bargain," selling at 58% of its book value, with the entire company's market capitalization less than $36 million, Mr. Hake said.

    He said it may take some time to make money on the investment, but "we're willing to be patient."

    "There's bargains out there, but you've got to hold on to them, (you've) got to weather out the storm," he said.

    Currently 40% to 45% of the portfolio is made up of Australian and New Zealand stocks, he said. Holdings include names such as Australian Oil and Gas Corp. Ltd., and Premier Investments, an Australian retailing company.

    Hake owns one Japanese issue, Chubu Suisan Co. Ltd., a fishing company that might be the cheapest stock selling in Japan, Mr. Hake said. The total market capitalization was so low that one could buy the company for essentially nothing.

    Johnston Schager Asset Management, New York, had the second ranking international equity return for the one-year period, reporting 24.6% for its international equity composite.

    Johnston Schager also ranked third for the quarter, with a return of 8%, fifth for the three-year period, with a return of 15.7%., and fourth for the five-year period, with a return of 19.5%.

    Massachusetts Mutual Life, Boston, reported the third ranking strategy, with a return of 24.4% for its international equity commingled fund, for the one-year period. Mass Mutual's fund ranked second for the quarter, with a return of 8.1%.

    Brandes Investment Partners L.P., San Diego, ranked fourth for the year, with a return of 23% in its international equity composite. Brandes also ranked fifth in the first quarter, with a return of 6.3%.

    Glenn Carlson, managing partner, said Brandes uses a bottom-up approach to pick stocks for investment in international.

    Big contributors to Brandes' performance were heavy weightings in the telecommunications sector, and an overweighting in Europe. Companies like Daimler-Benz A.G., Alcatel Cables, Telefonica de Espana S.A., and Societa Finanziaria Telefonica SpA.

    Brandes recently increased its weighting to Japan, as a result of finding some stocks that met its criteria, not as a result of a top-down decision.

    Northern Cross Investments, Boston, finished fifth for the year with a return of 22.1% for its EAFE strategy. Northern Cross' EAFE strategy also ranked eighth for the quarter with a return of 4.9%, third for the three-year period with a return of 18.2%, and fifth for the five years with a return of 19%.

    TT International Investment Management, London, ranked sixth for the 12 months, with a return of 20.5% in its active international equity composite. TT also finished sixth for the quarter, with a return of 5.2%; fourth for the three-year period, with 16.5%; and second for the five years, with 21.2%.

    Mark Williams, partner for TT, said three primary things contributed to their performance for the one-year period: the corporate restructuring in Europe, the rise in value in "red-chip" stocks in Hong Kong, and hedging the U.S. dollar for U.S.-based clients.

    The restructuring of selected European companies, in the fashion U.S. companies have, has created "a stock-picker's dream," Mr. Williams said.

    Bessemer Trust Co., London, ranked seventh in the 12 months with a return of 20.4% for its international fund E.

    John F.H. Trott, executive vice president for Bessemer, said that even though the firm's portfolios have benefited from the lack of exposure to the Japanese market, it bought some Japanese stocks beginning in the first quarter.

    Their weighting to Japan stood at 12% at the end of the quarter, up from nothing at the beginning. Bessemer started to invest in Japan based on falling share prices that discount a number of concerns about the Japanese market, while the outlook for the economy and specific sectors has improved.

    Mr. Trott noted Bessemer is overweighted in Australia and New Zealand. He said Australia share prices don't reflect that Australia is developing closer ties to the growth in Asia. Australia's industrial and financial stocks are priced at just 13 times their earnings, which might be more appropriate for the country's resource-based companies, he said.

    Manager holdings are subject to change prior to publication.

    PIPER data are compiled by RogersCasey & Associates, Darien, Conn.

    Recommended for You
    Read the print edition of P&I
    Targeting millennials: Author, niece put his latest book to music
    Targeting millennials: Author, niece put his latest book to music
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    Upside Ahead for Emerging Market Debt
    Sponsored Content: Upside Ahead for Emerging Market Debt
    Sponsored
    White Papers
    2023 Hot Topics in Retirement and Financial Wellbeing
    Bonds: Shaken, but Not Stirred
    A Study of Allocations to Alternative Investments by Institutions and Financial…
    Unlocking Hidden Value in Japan
    The Art of the Possible in Data Automation for Institutional Investors
    Parnassus View - Investing in AI: Transformative New Tech, Same Old Rules
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars