Portfolio Manager since 2014
International Small Cap Fund
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YTD Return
Return is shown net of fees. See performance below for additional disclosure.
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Total Assets
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Morningstar Rating
Overall rated 4 stars for the period ending 9/30/2020 out of 97 Foreign Small/Mid Blend funds. Morningstar rankings are based on risk-adjusted returns and the Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three, five, and ten year Morningstar Ratings metric.
Profile
The Cambiar International Small Cap Fund is a diversified portfolio that invests primarily in small-cap companies based outside of the U.S. The starting universe for the Fund includes any international business with a market cap between $500 million to $5 billion. Cambiar’s quality and value bias will result in a portfolio overweight to developed markets, and subsequent underweight in emerging markets.
Portfolio Construction:
- 40-50 International stocks
- Country Limit: 25% (at cost)
- Emerging Markets Limit: 15% (at cost)
Key Facts
- Ticker
- CAMFX
- Inception Date
- 11/18/2014
- Minimum
- $100,000
- Gross Expense
- 4.75%
- Net Expense
- 1.00%
Waivers are contractual until March 1, 2021.
Portfolio Managers
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Portfolio Manager since 2014
Performance
Returns greater than 1 year are annualized. The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Expense ratio is 4.75% (gross); 1.00% (net). Cambiar Investors, LLC has contractually agreed to reduce fees and reimburse expenses in order to keep net operating expenses from exceeding 0.95% of the average daily net assets of each of the Fund’s share classes until March 1, 2021. Absent these waivers, total return would be reduced. The MSCI EAFE Small Cap® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. & Canada. The index is unmanaged and one cannot invest directly in an Index.
The Fund charges a 2.00% redemption fee on redemptions of shares held for less than 180 days.
Composition
Top 10 holdings
Holdings subject to change.
Sector Weights (%)
Attributes
RISK STATISTICS
Active Share
Top Countries (%)
Cap Gains & Income
Disclosures
Mutual fund investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility and international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involved heightened risks related to the same factors as well as increased volatility and lower trading volume. There can be no assurance that the Fund will achieve its stated objectives.
To determine if a Fund is an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Fund’s summary or statutory prospectus which can be obtained by clicking here or calling 1-866-777-8227. Please read it carefully before investing. There is no guarantee that the Funds will meet their stated objectives.
Performance data quotes are past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end, please call 1-866-777-8227.
©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. CAMFX was rated against 97 Foreign Small/Mid Blend funds over a three year period and 82 over a five year period. With respect to these Foreign Small/Mid Blend funds, CAMFX received a rating of 4 stars and 4 stars, respectively. Past performance is no guarantee of future results.
Price/Earnings F1Y is a calculation that divides the current share price by the estimates of earnings in the next four quarters. Debt/Equity – Long Term is a calculation that takes interest-bearing, long-term debt divided by shareholder equity. EPS Growth – Long Term is a calculation that takes the company’s estimated profits for five years divided by the outstanding shares. Active share is a holdings-based measure of active management representing the percentage of securities in a portfolio that differ from those in the benchmark index. Alpha is a measure of risk-adjusted performance. Beta is a measure of risk in relation to the market or benchmark. The Sharpe Ratio is a direct measure of reward-to-risk and is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation. Standard Deviation is a statistical measure of historical volatility; a measure of the extent to which numbers are spread around their average. R-Squared measures how closely a portfolio’s performance correlates with the performance of a benchmark index. These calculations are not a forecast of the Fund’s future performance.
This material represents the portfolio manager’s opinion and is an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice or a specific recommendation of securities.
Total Assets represents assets under management for all share classes combined and are subject to change.
The MSCI EAFE Small Cap Value Index captures small-cap securities exhibiting overall value style characteristics across Developed Markets countries around the world, excluding the US and Canada. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. Index returns do not reflect any management fees, transaction costs or expenses. Individuals cannot invest directly in an index.
Cambiar Funds are distributed by SEI Investments Distribution Co., 1 Freedom Valley Dr. Oaks, PA 19456, which is not affiliated with the Advisor. Cambiar Funds are available to US investors only. Strategies included within the Separate Account section are not mutual funds and are not affiliated with SEI Investments Distribution Co.
Commentary
Global Markets – 3Q20 Review
International stocks rose in the third quarter, with the MSCI EAFE Index posting a return of 4.8%. The gains in the quarter were front-end loaded in July and August, as stocks pulled back in September on heightened concerns about the rise in COVID-19 cases taking place across Europe. International stocks trailed the U.S. markets (defined as the S&P 500 Index), which continue to be paced by a narrow handful of large tech companies. Although the S&P 500 Index has outperformed the EAFE Index by a wide margin on a year-to-date basis (5.6% vs. -7.1%), the spread narrows considerably when looking at the S&P 500 Index on an equal-weighted basis (-4.8% vs. -7.1%). This speaks to the outsized contribution of the ‘FAANG’ companies in 2020.
Outside the U.S., Japan and core Europe were positive contributors to the benchmark return, while UK stocks lagged in the quarter. In the aggregate, UK stocks have endured a more difficult 2020 relative to the broader international markets. Britain incurred the highest death rate from COVID-19 amongst its European peers, and the recent increase in social and work-from-home restrictions is further hampering the recovery. Uncertainty as to the government’s preparedness for the year-end expiration of the transitional trade agreement (remember Brexit?) has been another headwind for UK stocks. The prospect of the UK leaving the European Union at the end of the year without a trade deal (and the commensurate hit to the economy) has investors moving to the sidelines until there is more clarity on this front. Cambiar’s view is that a hard Brexit is a lower probability event – an agreement will likely be struck in the late October/early November timeframe, which allows sufficient time for ratification in the UK and European parliaments.
Growth vs. Value – Still Going…
Once again, growth stocks outpaced their value counterparts in the quarter – prompting the Energizer Bunny reference from the early 1990s. The MSCI EAFE Growth Index gained 8.4% in 3Q, vs. a return of 1.2% for the MSCI EAFE Value Index. The quarter brings the year-to-date spread between the two benchmarks to almost 2300 bps – the widest divergence on record. While recognizing that our clients have likely reached a level of fatigue with the value vs. growth narrative that has dominated this cycle, we would argue that this dynamic grows in relevance each day these spreads continue to widen. There is no question that the pandemic accelerated a number of trends that favor growth stocks. But there are logical limits to prices, no matter how strong the underlying fundamentals. Financial gravity is a very real investment concept, despite the growth at any price behavior that has currently overtaken the market.
The sentiment around value stocks could not be much worse than it is today. Despite the extended out-of-favor status currently ascribed to value, Cambiar continues to believe that buying companies using a price sensitive approach remains a key variable to compounding capital over time. If outperformance is a function of exceeding expectations, shouldn’t one be inclined to look in areas where expectations are low? The key here is to avoid the false positives that often accompany a process that is overly enamored by low valuations. A traditional low Price/Book philosophy was successful in the industrial age, but has been less effective as the world transitions to a digital economy. Cambiar’s relative value discipline seeks companies that are trading at reasonable valuations – but we attempt to avoid value traps by prioritizing quality over statistically cheap stocks. Quality can take on various meanings; Cambiar attempts to remove subjectivity by evaluating metrics such as leverage, free cashflow and return-on-equity/return-on asset metrics. We then determine an appropriate price level to attach to these attributes, with the goal of providing both a margin of safety as well as an attractive upside return over a forward 1-2 year timeframe.
Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar. Due to market risk and uncertainties, actual events, results, or performance may differ materially from that reflected or contemplated in such forward-looking statements. All information provided is not intended to be, and should not be construed as, investment, legal or tax advice. Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation. Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time, do not represent all of the securities purchased, sold, or recommended by Cambiar, and the reader should not assume that investments in the securities identified and discussed were or will be profitable. As with any investments, there are risks to be considered. All material is provided for informational purposes only and there is no guarantee that the opinions expressed herein will be valid beyond the date of this commentary.
Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts are based upon third-party sources that are deemed reliable; however, Cambiar does not guarantee its accuracy or completeness. As with any investments, there are risks to be considered. Past performance is no indication of future results. All material is provided for informational purposes only and there is no guarantee that any opinions expressed herein will be valid beyond the date of this communication.