Optimism in international equities
November 01, 2024
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5 min read
Harris | Oakmark’s David Herro, CIO-International Equities, Portfolio Manager; and Eric Liu, Portfolio Manager, discuss the macro events that have impacted the Oakmark International Fund’s performance in recent years and share why they are optimistic the international equity asset class may soon be headed for better days. Key points include:
- Why, many times, price movement is driven by macro events – such as the dot-com bubble in 2000 or the 2008 Great Financial Crisis – and not by fundamentals.
- Why they do not trade the price movement but instead look at how macro events impact the company's underlying intrinsic value – meaning its ability to grow and generate a cash-flow stream over the medium and long term.
- How, historically, the Oakmark International Fund has ended up outperforming after most crises when you combine the periods. In fact, over the past 32 years, it has outperformed by 2.5% per year.
- Why the fund’s return pattern, over the short term, can look very different from the benchmark index because it is not managed to an index and is long-term oriented.
- Why they believe it is critical to stay disciplined and adhere to their investment philosophy and process to achieve acceptable, long-term results.
- Why they remain confident that price and value will eventually assert itself.
