David herro’s oakmark global fund_ fourth quarter 2016 commentary – gurufocus. com


In writing these reports we probably should not ask questions for which we do not know the answer, and we do not in fact know whether political populism has inspired recent stock market gains. Practice problems Although many prognosticators warned that political trends in 2016 would be problematic for securities markets, in this event stock markets have proven to be quite resilient. Rub usd chart As is often said, “correlation does not imply causation,” and this could be true here. Dollar pak rupee exchange rate Perhaps the reaction in the U.S. Convert usd to kwd speaks most clearly to this issue. Usd rub exchange rate As the votes were being tallied on election night in November, the overnight futures market indicated that an extreme drop would occur when the market opened on Wednesday. Aud to usd history But when the opening bell rang, all was far more orderly, and the market eventually rose significantly during the day. Msn news usa homepage We do not know what to expect with the new administration, but it should be interesting. British pound to usd exchange rate We do worry that U.S. Sprint troubleshooting investors have become too optimistic concerning the possibilities for tax and regulatory relief. Currency converter usd to pounds We are especially glad to see the effect this optimism has had on the Fund’s financial holdings, however. Silver chart (See the next section for a more detailed discussion)

The Oakmark Global Fund’s three-month return was 8%, which compares to the 2% return in the period for both the MSCI World Index and the Lipper Global Fund Index.

Silver chart kitco For all of calendar 2016, the Fund gained 5%, which contrasts to 8% for both the MSCI World Index and the Lipper Global Fund Index. Dollar exchange rate history Since inception in 1999, the Fund has achieved a compound annual rate of return of 10%, which compares to 4% for the MSCI World Index and 5% for the Lipper Global Fund Index.

The U.S., United Kingdom and Switzerland contributed most to the Fund’s return in the quarter while Mexico and China detracted from its return. Gold price chart It is probably easiest to explain the weakness in the Mexican stock market after the U.S. Convert cny to usd election, given the president-elect’s promises to implement new tariffs. Futures market cnbc The five largest contributors to the Fund’s return in the quarter were Bank of America (U.S.), CNH Industrial (U.K.), Citigroup (U.S.), Incitec Pivot (Australia) and Credit Suisse (Switzerland). Binary search tree visualization The Fund holdings that detracted most were Tenet Healthcare (U.S.), Grupo Televisa (Mexico), Baidu (China), Diageo (U.K.) and Hirose (Japan).

The calendar year saw the U.S., the U.K. Gender identity issues and South Korea contributing most to investment return while Switzerland, France and Australia detracted most. Uk to us currency The leading contributors were CNH Industrial, Bank of America, LinkedIn (U.S.—sold), Itron (U.S.) and Union Pacific (U.S.). 1 usd to ngn The largest detractors were Credit Suisse, Tenet Healthcare, BNP Paribas (France—sold), Incitec Pivot and Grupo Televisa.

We have written much in 2016 concerning the financials sector, both because of the Global Fund’s large industry allocation and because of the sector’s extreme price volatility. Joy newsome By the middle of February, banking industry stocks in both Europe and the U.S. Exchange rate usd euro had suffered double-digit price declines as investors fretted over ever-intensifying regulation and subpar economic growth. Msn news usa english In the second quarter, U.K. Djia futures marketwatch and European bank stock prices plunged after the Brexit vote. Usd gbp rate The third quarter witnessed a crisis of confidence over Deutsche Bank ( NYSE:DB) as investors considered the possibility of contagion from that institution’s travails. Currency converter cny to usd And for much of the year the world has seen a new phenomenon: negative yields on as much as $13 trillion in outstanding debt (primarily sovereign).

In the fourth quarter, however, the financials sector enjoyed a substantial price recovery. Stock ticker for oil futures U.S. Yen usd exchange rate bank stocks ended the year with positive returns, and European and Japanese shares showed double-digit gains in the second half. Gender definition What has happened to promote this outcome? To quote the December 30 Financial Times, “One of the main causes for optimism is the prospect of higher interest rates as policy gears are seen switching from monetary to fiscal measures in the coming year. Gold price 2016 forecast Rising long-term bond yields help banks by boosting their net interest margin—the difference between the rates on their borrowing and lending.” Another important factor is the perception that the regulatory environment has stopped worsening. Stock connection It appears that most of the significant bad behavior penalties have now been assessed and that capital ratios are firmly established. Usa today high school football rankings Were corporate tax rates to be reduced in the U.S., banks may even start earning more than their cost of capital. Zloty usd We are not so optimistic as to predict that our financial holdings will return to their pre-2008 profitability levels, but at current share prices we believe that the sector is still attractive.

We initiated one new position in the quarter and eliminated one holding. Usps shipping Both issues are U.K.-domiciled entities. Gender quiz boy or girl We sold our holding in Smiths Group ( LSE:SMIN), a conglomerate active in seals (primarily for the oil and gas sector), healthcare, detection and connectors. Stock market futures cnn Smiths’ new management team had a strong first year at the helm, highlighted by margin improvement at the detection division, the announced acquisition of Safran’s Morpho detection business and a significant de-risking of its U.K. Futures tradingcharts market quotes pension plan. Decimal to binary We view these developments favorably, as do other investors, and the share price has risen nearly 50% in local currency. Binary calculator online However, this increased price more closely reflects our view of the business’ intrinsic value and thus we’ve found more attractive investment alternatives.

Our “new” purchase is actually a return engagement: Travis Perkins ( LSE:TPK). Usd price Travis is the largest supplier of building materials in the U.K., serving both the trade market via its Travis Perkins brand as well as the do-it-yourself market via its Wickes brand. Usd to aed conversion The share price came under considerable pressure following the U.K.’s vote to leave the European Union, which we believe provides us with an attractive entry point. Euro to indian rupee exchange rate today Brexit will likely result in a period of slower near-term demand for Travis Perkins, but over the medium term we believe that demand for building materials in the U.K. Futures market history will grow due to structural shortages of housing stock and infrastructure. Cnn money markets futures We expect Travis will continue to gain market share, given its leading brands and best in class management team.

Although we have repeatedly trimmed U.S. Cad to usd history holdings in 2016, the stronger relative performance of U.S. Binary file markets has had the effect of keeping the country weight steady. Python commands The Fund remains underweight the U.S. Euro to dollar conversion rate today relative to its position in the MSCI World Index, and this difference has become more pronounced with the differential in returns in 2016. Exchange rate usd to aed As always, we do not invest with the benchmark in mind and instead go where we find the most attractive, undervalued equities. Usd to euro graph Switzerland, the U.K. Usd to inr exchange rate today and Germany are overweight in the Fund versus the index.

While the Swiss franc and Australian dollar weakened versus the U.S. Exchange rate cny to usd dollar during the quarter, we continue to believe they are overvalued. Inr to usd conversion rate today As a result, we defensively hedged a portion of the Fund’s exposure. Convert usd to euro calculator Approximately 24% of the Swiss franc and 10% of the Australian dollar were hedged at quarter end.

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