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Ariel Global 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: AGLOX
Institutional Class: AGLYX
Fund Assets (all classes):
$38.2 million as of 03/31/2014
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 

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

Investor Class
Institutional Class
Quarter End
Month End
Ariel Global Fund

Performance

As of March 31, 2014
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year To
Date
One
Year
Since
Inception
Ariel Global Fund 0.37% 2.50% 2.50% 21.21% 15.44%
MSCI AC World Index 0.50% 1.21% 1.21% 17.17% 18.27%
Ariel Global Fund

Performance

As of March 31, 2014
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year To
Date
One
Year
Since
Inception
Ariel Global Fund 0.37% 2.50% 2.50% 21.21% 15.44%
MSCI AC World Index 0.50% 1.21% 1.21% 17.17% 18.27%
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: 5.37%*

*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 Global 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 ACWI (All Country World Index) IndexSM is an unmanaged, market-weighted index of global developed and emerging markets. 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 Global Fund

Sector Weightings (%)

As of March 31, 2014
  Ariel Global Fund MSCI ACWI
Health Care 21.72 10.65
Information Technology 20.51 12.67
Financials 14.80 21.53
Consumer Discretionary 12.82 11.65
Consumer Staples 10.82 9.69
Telecommunication Services 6.36 3.90
Energy 5.61 9.66
Industrials 3.69 10.84
Materials 1.92 6.13
Utilities 1.54 3.29
Unclassified 0.19 0.00

Represents percentage of total equity holdings in the portfolio

MSCI ACWI (All Country World Index) IndexSM is an unmanaged, market-weighted index of global developed and emerging markets. 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.

Ariel Global Fund

Schedule of Holdings

As of March 31, 2014
  Units Security Description Market Value % of Total Value
BRAZIL     122,003 0.3
  5,744 Telefonica Brasil SA ADR 122,003 0.3
CANADA     652,179 1.7
  1,087 Fairfax Financial Holdings Ltd. 471,967 1.2
  4,979 Canadian Oil Sands 104,444 0.3
  1,370 Tim Hortons Inc. 75,768 0.2
CHINA     1,673,919 4.3
  17,000 China Mobile Ltd. ADR 775,030 2.0
  51,500 China Mobile Ltd. 471,411 1.2
  2,346 Baidu, Inc. ADR 357,483 0.9
  2,163 Mindray Medical Intl Ltd. 69,995 0.2
CZECH REPUBLIC     66,170 0.2
  277 Komercni Banka AS 66,170 0.2
FINLAND     642,513 1.7
  52,134 Nokia Corp. ADR 382,664 1.0
  34,994 Nokia Corp. 259,849 0.7
FRANCE     1,255,079 3.3
  17,742 Eutelsat Communications 602,502 1.6
  3,324 Technip SA 343,036 0.9
  4,013 BNP Paribas SA 309,541 0.8
GERMANY     1,834,408 4.8
  16,501 Deutsche Boerse AG 1,313,262 3.4
  36,492 Telefonica Deutschland Holding AG 290,881 0.8
  9,322 Dialog Semiconductor plc 230,265 0.6
HONG KONG     239,741 0.6
  73,500 Yue Yuen Industrial 239,741 0.6
IRELAND     140,615 0.4
  2,391 Ryanair Holdings plc ADR 140,615 0.4
ITALY     565,547 1.5
  96,592 Snam SpA 565,547 1.5
JAPAN     3,465,270 9.2
  6,900 Shimamura Co., Ltd. 596,977 1.6
  19,200 Canon Inc. 593,588 1.5
  8,500 Tokyo Electron Ltd. 520,879 1.4
  5,000 Daito Trust Construction Co., Ltd. 462,675 1.2
  3,750 Nintendo Co., Ltd 445,429 1.2
  10,400 Japan Tobacco Inc. 326,464 0.9
  4,500 Toyota Motor Corp. 254,004 0.7
  1,155 Toyota Motor Corp. ADR 130,399 0.3
  4,600 Nikon Corp. 74,071 0.2
  1,957 Canon Inc. ADR 60,784 0.2
NETHERLANDS     1,352,580 3.5
  67,339 Koninklijke Ahold NV 1,352,580 3.5
SINGAPORE     74,315 0.2
  3,000 United Overseas Bank Ltd. 51,634 0.1
  3,000 Oversea-Chinese Banking Corp. Ltd. 22,681 0.1
SPAIN     418,425 1.1
  7,407 Tecnicas Reunidas SA 418,425 1.1
SWEDEN     90,014 0.2
  897 Autoliv Inc. 90,014 0.2
SWITZERLAND     3,538,213 9.3
  6,106 Roche Holding AG 1,830,315 4.8
  2,084 Zurich Insurance Group Ltd 639,780 1.7
  745 Swisscom AG 457,593 1.2
  5,131 Nestle SA 386,254 1.0
  10,858 UBS AG 224,271 0.6
TURKEY     197,191 0.6
  4,388 BIM Birlesik Magazalar A.S. 98,846 0.3
  7,142 Turkcell Iletisim Hizmetleri AS ADR 98,345 0.3
UNITED KINGDOM     4,066,965 10.5
  25,157 GlaxoSmithKline PLC ADR 1,344,138 3.5
  178,299 Tesco plc 878,080 2.3
  9,627 Royal Dutch Shell plc ADR 703,349 1.8
  56,680 HSBC Holdings plc 574,051 1.5
  4,923 Royal Dutch Shell plc 179,824 0.5
  3,143 Croda Intl plc 133,407 0.3
  2,549 HSBC Holdings plc ADR 129,566 0.3
  19,686 British Telecom Group plc 124,550 0.3
UNITED STATES     17,769,282 46.4
  50,138 Microsoft Corp. 2,055,157 5.4
  19,009 Johnson & Johnson 1,867,254 4.9
  26,014 Gilead Sciences, Inc. 1,843,352 4.8
  13,622 Harman Intl Industries Inc. 1,449,381 3.8
  1,395,904 Fixed Income Clearing Corporation 1,395,904 3.6
  19,036 Quest Diagnostics Inc. 1,102,565 2.9
  33,258 Broadcom Corp. 1,046,962 2.7
  38,868 Tumi Holdings Inc. 879,583 2.3
  56,747 Acacia Research Corporation 867,094 2.3
  14,256 U.S. Bancorp 611,012 1.6
  4,382 Praxair, Inc. 573,911 1.5
  31,702 NVIDIA Corp. 567,783 1.5
  6,952 Wal-Mart Stores, Inc. 531,341 1.4
  4,945 Philip Morris Intl Inc. 404,847 1.1
  31,200 Ruckus Wireless, Inc. 379,392 1.0
  6,492 Coach, Inc. 322,393 0.8
  3,203 The PNC Financial Service Group, Inc. 278,661 0.7
  2,681 Occidental Petroleum Corp. 255,472 0.7
  6,419 Expeditors Intl of Washington 254,385 0.7
  2,024 Berkshire Hathaway Inc. 252,939 0.7
  8,858 EMC Corp. 242,798 0.6
  16,192 QLogic Corp. 206,448 0.5
  9,518 TIBCO Software Inc. 193,406 0.5
  1,804 C.H. Robinson Worldwide, Inc. 94,512 0.2
  750 National Oilwell Varco 58,402 0.1
  283 M&T Bank Corp. 34,328 0.1
Total Equities     38,164,429 99.8
Cash, Other Assets less Liabilities     76,308 0.2
Grand Total     38,240,737 100.0

Ariel Global 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.