In Part 1 of this series, we looked at some of the best closed mutual funds in the large-cap sector, while Part 2 showcased notable small-cap candidates. To conclude, we'll examine some of the best closed international funds.
Julius Baer International Equity (BJBIX)
This fund isn't afraid to stand out from the market. Managers Richard Pell and Rudolph-Riad Young focus heavily on top-down macroeconomic analysis in identifying attractive foreign securities. At times, the fund differs significantly from the MSCI EAFE Index, with Japan underweighted and emerging markets heavily favored. Current top holdings include Vodafone
International Equity's enjoyed strong performance, besting the EAFE benchmark in nine of the past 10 years. Its 10-year annualized return of 17.6% compares favorably to just 8.7% for the EAFE Index, and it's one of the best such results for any international equity fund. Each manager has been with the fund for more than 12 years, providing a deep and experienced management bench. Given all these factors, it's little wonder the fund racked up so much in assets so quickly and had to close. I'd want to own this one, too!
William Blair International Growth (WBIGX)
The William Blair International Growth fund looks for profitable foreign companies with solid fundamentals. Manager George Grieg, who has headed the fund since 1996, looks beyond typical large-cap foreign companies in developed markets, delving into more obscure areas in search of good opportunities. Right now, the fund has invested heavily in the U.K., Japan, and France, including firms such as L'Oreal and Canon
Its performance has been quite impressive, particularly for an international growth fund. Even though the fund lost money during the bear market of 2000-2002, it still outperformed the EAFE benchmark in each of those years. A great long-term performance track record, reasonable expenses, and a widely diversified portfolio add to its appeal. Asset levels here are relatively low -- just short of $7 billion. With the wind at its back and wide flexibility to exercise its investment strategies, the William Blair International Growth fund should have plenty more room to run.
Boston Company International Equity (SDIEX)
The last stop on our tour concentrates on large-cap value, investing exclusively in developed markets found in the EAFE Index. Lead portfolio manager Remi Browne, on board since 1996, is assisted by co-portfolio manager Peter Carpenter. Currently, they're finding value in companies such as Societe Generale, Toyota
This fund has been another solid international performer, racking up an annualized 12.8% return through the end of April 2007. That's more than 4 percentage points ahead of the EAFE Index. Performance in the more speculative years of 1997 and 1999 was a bit lacking, but for a more value-oriented fund, that shouldn't be too alarming. This fund tends to be slightly more concentrated, with 30% of the portfolio currently in financial stocks and another 18% in industrial materials. That's almost half of the portfolio in just two sectors. However, this is more than offset by its low turnover (27%) and net expense ratio (0.88%), and its positive performance history. The Boston Company International Equity fund should continue to benefit its current shareholders.
Keeping an open mind on closed funds
If you really want to get into one of these funds, don't kick yourself! You've got three courses of action. First, wait to see whether the fund you want opens again. Sometimes funds do so, ever so briefly, closing again once they've reached a desirable asset level. Second, check your 401(k) investment options to see whether any of these funds are available to you. Funds often remain open to additional investment from within retirement plans, even after they've closed. Finally, look for funds with similar goals and strategies within each of these fund families. Happy hunting!
Further fund-amental Foolishness:
Fool contributor Amanda Kish lives in Rochester, N.Y., and does not own shares of any of the companies or funds mentioned herein. Vodafone is an Inside Value recommendation. Total and Glaxo are Income Investor picks. It's never too late for the Fool's disclosure policy.