5-Star Manager's Global Stock Picks
Masters’ Select International Fund, rated 5 stars by Morningstar, achieved 35.69 percent return so far this year with about $1.3 billion assets under management. Jeremy Degroot, portfolio manager of the fund, shared his best global stock picks with CNBC.
“Our portfolio is represented across the globe, but I think one theme that has played through the portfolio is emphasis on the growth in the emerging market and emerging middle class within those markets,” Degroot says.
But one doesn’t have to directly invest in emerging market stocks to benefit from it. Degroot’s fund invested heavily in European companies for their good valuation and strong presence in the emerging markets.
Degroot is concerned about over-investing in emerging markets. Yet his view is that short-term volatility doesn’t interfere with long-term profitability.
“Our managers have a long investment horizon,” Degroot says. “There might be some volatilities in between. But if you look at three to five years or longer, I think that is where the growth will be. The opportunity to serve this emerging consuming class in those countries is a powerful investment theme.”
In terms of foreign exchange rate between the Chinese yuan and the U.S. dollar, Degroot says a strong yuan would benefit both the Chinese consumers and the U.S. investors.
“The likelihood of a declining dollar is basically a tailwind overall for investing in these foreign markets,” Degroot says.
The fund has invested 50 percent in Western Europe and about 16.5 percent in Asia (excluding Japan), 10.5 percent in Japan, 8.4 percent in Latin America and 7.5 percent in North America.
The fund’s top holdings are UBS, Actelion, Petroleo Brasileiro, Xstrata, Dell, Teva Pharmaceuticals, Gazprom, Neopost, Richemont CIE Fin andViterra.
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Disclosure information was not available for his company.