Global Strategy
Ariel International Fund

Why Ariel’s global approach


Our emphasis is on generating attractive absolute and relative returns while seeking to limit downside risk in our global portfolios.

Experience matters

Rupal J. Bhansali, our chief investment officer for international equities, has more than 20 years of industry experience.

Managing risk is a top priority

We pay as much attention to risk management as to return management.

Screening out provides a stronger starting point

While others screen in, we begin our process by screening out high-risk companies.

All-cap portfolios offer larger opportunity set

Although our portfolios are relatively concentrated, we consider companies of all sizes.

Attention to business models builds more resilient portfolios

In addition to applying our financial models, we consider the long-term viability of each company’s business model.

Key Facts
Market Cap Range: All Cap
Inception:
Investor Class: 12/30/2011
Institutional Class: 12/30/2011
Number of companies: 50-150
Turnover: 30-80%
Ticker Symbol:
Investor Class: AINTX
Institutional Class: AINIX
Fund Assets (all classes):
$13.3 million as of 09/30/2014
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 
Fund Spotlight
Meet Rupal J. Bhansali and hear her philosophy on global investing.
Rupal J. Bhansali talks risk management and finding the blue chips of tomorrow.
 

Our global investment philosophy


Patience

We take the long-term view.
  • Complementary objectives: Higher absolute and relative returns over a full market cycle with less risk
  • Focus research as much on what can go wrong as what can go right

Independence

We invest to our convictions, not to benchmarks.
  • Benchmark aware only to the extent that tracking error is by design and not by default
  • Significant exposure to our highest-conviction ideas, tempered with prudent risk controls

Expertise

We specialize in bottom-up fundamental research.
  • Ask questions to gain insight, not just information
  • Conduct in-country visits
  • Take business analyst approach rather than stock analyst approach
  • Research a company’s global peers to inform our competitive assessment

Teamwork

We work collaboratively with a shared commitment to excellence.
  • Debate best, base and worst case scenarios for every company considered
  • Three team members with clearly defined roles vet each stock

 
RB-Int-Global-Investing1.png
Rupal Bhansali on International and Global Investing I
 
RB-Int-Global-Investing2.png
Rupal Bhansali on International and Global Investing II

Our global process


Negative Screening

Negative screening strives for downside protection
  • Process:
    Screen on risk, not growth rate or valuation
  • Risk management:
    Eliminate approximately 60% of high-risk stocks in benchmark
  • Benefit:
    Potential downside protection

Bottom-up Research

Proprietary bottom-up research enables better stock picking
  • Process:
    Lead analysts perform research
  • Risk management:
    Assess the prospects and durability of a business franchise
  • Benefit:
    Proprietary insights enable better stock picking

Team Validation

Team validation avoids blind spots in our analysis
  • Process:
    A team of three debates and stress tests each idea
  • Risk management:
    Go beyond industry specialist, avoiding groupthink by assigning devil’s advocate and "fresh" analyst
  • Benefit:
    Ideas vetted from multiple perspectives yield more informed final decisions by portfolio manager

Portfolio Construction

Portfolios constructed to manage risks as well as long-term performance
  • Process:
    Seek to own top decile of investment opportunities uncovered
  • Risk management:
    Cap security position size at 5% at cost, typically limit sector weights at the higher of 25% or 1.5x benchmark, hedge currency if practical and cost efficient
  • Benefit:
    A diverse portfolio that balances long-term performance with risk management

Ariel International Fund

Sector Weightings (%)

As of June 30, 2014
  Ariel International Fund MSCI EAFE MSCI ACWI ex US
Financials 18.02 25.29 26.54
Consumer Discretionary 17.50 11.86 10.75
Information Technology 17.08 4.43 6.84
Consumer Staples 12.18 11.08 9.88
Health Care 11.25 10.54 8.17
Telecommunication Services 8.50 4.91 5.18
Energy 6.99 7.29 9.57
Utilities 3.59 3.88 3.62
Industrials 3.33 12.69 11.00
Materials 1.57 8.02 8.45
Unclassified 0.00 0.00 0.00

Represents percentage of total equity holdings in the portfolio

MSCI EAFE® Index is an unmanaged, market-weighted index of companies in developed markets, excluding the U.S. and Canada. The MSCI ACWI (All Country World Index) ex-US Index is an unmanaged, market-weighted index of global developed and emerging markets, excluding the United States. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.

These sectors are the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Ariel Investments, LLC. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Investor Class
Institutional Class
Quarter End
Month End
Ariel International Fund

Performance

As of September 30, 2014
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year To
Date
One
Year
Since
Inception
Ariel International Fund -4.17% -6.40% 0.08% 5.22% 10.52%
MSCI EAFE -3.81% -5.83% -0.99% 4.70% 14.14%
MSCI ACWI ex-US -4.81% -5.19% 0.39% 5.22% 11.95%
Ariel International Fund

Performance

As of September 30, 2014
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year To
Date
One
Year
Since
Inception
Ariel International Fund -4.17% -6.40% 0.08% 5.22% 10.52%
MSCI EAFE -3.81% -5.83% -0.99% 4.70% 14.14%
MSCI ACWI ex-US -4.81% -5.19% 0.39% 5.22% 11.95%
Expense Cap as of 2/1/14: 1.25%*
Net Expense Ratio as of the fiscal year ended 9/30/13: 1.40%*
Gross Expense Ratio as of the fiscal year ended 9/30/13: 9.36%*

*Effective February 1, 2014, Ariel Investments, LLC, the Adviser, has contractually agreed to waive fees or reimburse expenses (the “Expense Cap”) in order to limit Ariel International Fund’s total annual operating expenses to 1.25% of net assets for the Investor Class through the end of the fiscal year ending September 30, 2016. Through January 31, 2014, the Expense Cap will continue to be 1.40% for the Investor Class.

Investments in foreign securities may underperform and may be more volatile than comparable U.S. stocks because of the risks involving foreign economies and markets, foreign political systems, foreign regulatory standards, foreign currencies and taxes. The use of currency derivatives and exchange-traded funds (ETFs) may increase investment losses and expenses and create more volatility. Investments in emerging and developing markets present additional risks, such as difficulties in selling on a timely basis and at an acceptable price. The intrinsic value of the stocks in which the Fund invests may never be recognized by the broader market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains. 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. Current performance may be lower or higher than the performance data quoted.

MSCI EAFE® Index is an unmanaged, market-weighted index of companies in developed markets, excluding the U.S. and Canada. The MSCI EAFE Index (gross) returns reflect the reinvestment of income and other earnings, including the maximum possible dividends. The MSCI ACWI (All Country World Index) ex-US Index is an unmanaged, market-weighted index of global developed and emerging markets, excluding the United States. The MSCI ACWI ex US Index (gross) returns reflect the reinvestment of income and other earnings, including the maximum possible dividends. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI.

Investors should consider carefully the investment objectives, risks, and charges and expenses before investing. For a current summary prospectus or full prospectus which contains this and other information about the funds offered by Ariel Investment Trust, call us at 800-292-7435 or click here. Please read the summary prospectus or full prospectus carefully before investing. Distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC.

Ariel International Fund

Schedule of Holdings

As of September 30, 2014
  Units Security Description Market Value % of Total Value
AUSTRALIA     7,147 0.1
  1,495 AMP Ltd. 7,147 0.1
AUSTRIA     86,256 0.6
  1,910 Vienna Insurance Group 86,256 0.6
CANADA     156,771 1.2
  6,191 Canadian Oil Sands Ltd. 114,207 0.9
  95 Fairfax Financial Holdings Ltd. 42,564 0.3
CHINA     755,337 5.7
  9,562 China Mobile Ltd. ADR 561,767 4.2
  887 Baidu, Inc. ADR 193,570 1.5
DENMARK     10,868 0.1
  278 Vestas Wind Systems AS 10,868 0.1
FINLAND     590,866 4.3
  62,101 Nokia Corp. ADR 525,374 3.9
  6,962 Nokia Corp. 59,399 0.4
  202 Nokian Renkaat Corp. 6,093 0.0
FRANCE     961,084 7.4
  9,279 Eutelsat Communications 299,618 2.3
  3,410 Technip SA 286,889 2.2
  3,137 BNP Paribas SA 208,094 1.6
  831 L'Air Liquide SA 101,359 0.8
  558 Michelin (CGDE) 52,633 0.4
  926 Societe Television Francaise 1 12,491 0.1
GERMANY     1,385,132 10.4
  8,960 Deutsche Boerse AG 603,532 4.5
  75,168 Telefonica Deutschland Holding AG 393,056 3.0
  11,251 Dialog Semiconductor plc 316,114 2.4
  418 MTU Aero Engines AG 35,690 0.3
  941 Deutsche Post AG 30,177 0.2
  91 SAP SE 6,563 0.0
HONG KONG     97,930 0.7
  32,085 Yue Yuen Industrial Holdings Ltd. 97,930 0.7
IRELAND     370,294 2.8
  6,562 Ryanair Holdings plc ADR 370,294 2.8
ITALY     603,955 4.6
  81,068 Snam SpA 448,481 3.4
  30,109 Mediaset SpA 115,609 0.9
  1,062 DiaSorin SpA 39,865 0.3
JAPAN     2,377,585 18.0
  6,300 Toyota Motor Corp. 371,250 2.8
  3,900 Shimamura Co., Ltd. 358,441 2.7
  10,100 Canon Inc. 328,808 2.5
  2,800 Nintendo Co., Ltd. 304,573 2.3
  2,500 Daito Trust Construction Co., Ltd. 295,304 2.2
  3,000 Tokyo Electron Ltd. 195,797 1.5
  4,200 Japan Tobacco Inc. 136,598 1.0
  2,703 Canon Inc. ADR 88,091 0.7
  5,800 Nikon Corp. 83,820 0.6
  1,700 Denso Corp. 78,354 0.6
  2,100 OBIC Co., Ltd. 75,058 0.6
  415 Toyota Motor Corp. ADR 48,775 0.4
  936 Nintendo Co., Ltd. ADR 12,716 0.1
LUXEMBOURG     71,174 0.6
  548 RTL Group 46,907 0.4
  283 RTL Group 24,267 0.2
NETHERLANDS     627,584 4.7
  37,647 Ahold N.V. 609,592 4.6
  196 Gemalto N.V. 17,992 0.1
PORTUGAL     19,875 0.1
  1,805 Jeronimo Martins SGPS SA 19,875 0.1
SINGAPORE     35,118 0.3
  2,000 United Overseas Bank Ltd. 35,118 0.3
SPAIN     118,063 0.9
  1,682 Tecnicas Reunidas SA 89,206 0.7
  4,703 Banco Popular Espanol SA 28,792 0.2
  4,703 Banco Popular Espanol SA Right 65 0.0
SWEDEN     92,155 0.7
  1,629 H&M Hennes & Mauritz AB 67,612 0.5
  267 Autoliv Inc. 24,543 0.2
SWITZERLAND     1,779,965 13.4
  2,417 Roche Holding AG 716,720 5.4
  4,256 Nestle SA 313,171 2.4
  892 Zurich Insurance Group Ltd 266,096 2.0
  393 Swisscom AG 223,319 1.7
  10,179 UBS AG 177,629 1.3
  120 Banque Cantonale Vaudoise 64,355 0.5
  9 SGS SA 18,675 0.1
UNITED KINGDOM     2,115,763 15.7
  13,154 GlaxoSmithKline plc ADR 604,689 4.5
  34,110 HSBC Holdings plc 346,217 2.6
  4,194 Royal Dutch Shell plc ADR 319,289 2.4
  98,108 Tesco plc 296,147 2.2
  21,851 British Telecom Group plc 134,469 1.0
  2,867 Royal Dutch Shell plc 109,619 0.8
  2,146 Croda Intl plc 71,424 0.5
  2,378 GlaxoSmithKline plc 54,472 0.4
  319 British American Tobacco plc ADR 36,073 0.3
  3,283 IG Group Holdings plc 31,641 0.2
  568 HSBC Holdings plc ADR 28,900 0.2
  454 BT Group plc ADR 27,912 0.2
  4,643 Sage Group plc 27,504 0.2
  316 Reckitt Benckiser Group plc 27,407 0.2
UNITED STATES     589,022 4.4
  1,257 Harman Intl Industries, Inc. 123,236 0.9
  2,896 Vanguard MSCI EAFE ETF 115,116 0.9
  5,177 Tumi Holdings Inc. 105,352 0.8
  1,947 Coach, Inc. 69,333 0.5
  822 Philip Morris Intl, Inc. 68,555 0.5
  4,481 Ruckus Wireless, Inc. 59,866 0.4
  325 Core Laboratories N.V. 47,564 0.4
Total Equities     12,851,944 96.7
Cash, Other Assets less Liabilities     445,268 3.3
Grand Total     13,297,212 100.0

Ariel International Fund

Commentary

 
Monthly Commentary: Perspectives on the current market
Quarterly Report: Quarterly performance update and communication to investors
Fact Sheets: Quarterly overview of fund objectives and performance summary
Past performance does not guarantee future results. © Ariel Investments, LLC. The mutual funds offered by Ariel Investment Trust are distributed by Ariel Distributors, LLC. Use of this website is subject to our Terms & Conditions of use. Each of the investment products, mutual funds or services referred to in this site may be offered only to persons in the United States. This web site should not be considered a solicitation or offering of any investment products, funds or services to investors outside the United States. Original illustrations © Omar Rayyan 2007.