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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):
$11.7 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 International 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 International Fund -0.15% 2.18% 2.18% 24.07% 14.05%
MSCI EAFE -0.57% 0.77% 0.77% 18.06% 18.47%
Ariel International 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 International Fund -0.15% 2.18% 2.18% 24.07% 14.05%
MSCI EAFE -0.57% 0.77% 0.77% 18.06% 18.47%
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. 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. 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

Sector Weightings (%)

As of December 31, 2013
  Ariel International Fund MSCI EAFE
Consumer Discretionary 18.04 11.93
Information Technology 17.96 4.52
Financials 17.23 25.63
Consumer Staples 14.77 10.93
Health Care 11.10 10.03
Telecommunication Services 7.35 5.69
Energy 5.29 7.25
Utilities 3.57 3.51
Industrials 3.57 12.92
Materials 1.13 7.60

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. 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 International Fund

Schedule of Holdings

As of March 31, 2014
  Units Security Description Market Value % of Total Value
AUSTRALIA     15,065 0.1
  3,262 AMP Ltd. 15,065 0.1
AUSTRIA     78,347 0.7
  1,589 Vienna Insurance Group 78,347 0.7
CANADA     149,124 1.2
  279 Fairfax Financial Holdings Ltd. 121,140 1.0
  506 Tim Hortons Inc. 27,984 0.2
CHINA     516,184 4.4
  7,540 China Mobile Ltd. ADR 343,749 2.9
  887 Baidu, Inc. ADR 135,161 1.2
  4,072 China Mobile Ltd. 37,274 0.3
CZECH REPUBLIC     17,199 0.2
  72 Komercni Banka AS 17,199 0.2
FINLAND     363,882 3.1
  42,532 Nokia Corp. ADR 312,185 2.7
  6,962 Nokia Corp. 51,697 0.4
FRANCE     689,081 5.8
  9,739 Eutelsat Communications 330,727 2.8
  1,487 Technip SA 153,458 1.3
  1,536 BNP Paribas SA 118,479 1.0
  638 L'Air Liquide S.A. 86,417 0.7
GERMANY     951,286 8.1
  6,665 Deutsche Boerse AG 530,446 4.5
  8,209 Dialog Semiconductor plc 202,773 1.7
  22,629 Telefonica Deutschland Holding AG 180,378 1.6
  278 MTU Aero Engines AG 25,836 0.2
  319 Deutsche Post AG 11,853 0.1
HONG KONG     109,547 0.9
  33,585 Yue Yuen Industrial 109,547 0.9
IRELAND     255,882 2.2
  4,351 Ryanair Holdings plc ADR 255,882 2.2
ITALY     514,321 4.4
  67,455 Snam SpA 394,950 3.4
  14,298 Mediaset SpA 79,933 0.7
  919 DiaSorin SpA 39,438 0.3
JAPAN     1,895,415 16.3
  3,200 Shimamura Co., Ltd. 276,859 2.4
  8,500 Canon Inc. 262,786 2.3
  4,100 Toyota Motor Corp. 231,426 2.0
  1,900 Nintendo Co., Ltd 225,684 1.9
  3,300 Tokyo Electron Ltd. 202,224 1.7
  2,100 Daito Trust Construction Co., Ltd. 194,324 1.7
  3,600 Japan Tobacco Inc. 113,007 1.0
  900 Murata Manufacturing Co., Ltd. 84,886 0.7
  2,703 Canon Inc. ADR 83,955 0.7
  1,800 OBIC Co. Ltd. 56,852 0.5
  415 Toyota Motor Corp. ADR 46,854 0.4
  2,800 Nikon Corp. 45,086 0.4
  1,200 Chugai Pharmaceutical Co., Ltd. 30,635 0.3
  900 JIN Co., Ltd. 26,900 0.2
  936 Nintendo Co., Ltd ADR 13,937 0.1
LUXEMBOURG     62,782 0.5
  548 RTL Group 62,782 0.5
NETHERLANDS     541,643 4.6
  26,966 Koninklijke Ahold NV 541,643 4.6
NORWAY     34,458 0.3
  1,694 Gjensidige Forsikring ASA 34,458 0.3
SINGAPORE     41,982 0.4
  2,000 United Overseas Bank Ltd. 34,422 0.3
  1,000 Oversea-Chinese Banking Corp. Ltd. 7,560 0.1
SPAIN     132,640 1.1
  2,348 Tecnicas Reunidas SA 132,640 1.1
SWEDEN     111,195 0.9
  1,438 H&M Hennes & Mauritz AB 61,321 0.5
  497 Autoliv Inc. 49,874 0.4
SWITZERLAND     1,550,749 13.3
  1,910 Roche Holding AG 572,535 4.9
  4,194 Nestle SA 315,718 2.7
  807 Zurich Insurance Group Ltd 247,746 2.1
  8,749 UBS AG 180,710 1.6
  288 Swisscom AG 176,895 1.5
  98 Banque Cantonale Vaudoise 57,145 0.5
UNITED KINGDOM     1,869,115 16.2
  10,017 GlaxoSmithKline PLC ADR 535,208 4.6
  75,957 Tesco plc 374,070 3.2
  28,130 HSBC Holdings plc 284,899 2.4
  3,317 Royal Dutch Shell plc ADR 242,340 2.1
  4,624 Royal Dutch Shell plc 168,902 1.5
  15,807 British Telecom Group plc 100,008 0.9
  2,178 Croda Intl plc 92,447 0.8
  454 BT Group plc ADR 28,988 0.3
  208 British American Tobacco plc ADR 23,177 0.2
  946 IG Group Holdings plc 9,896 0.1
  346 GlaxoSmithKline plc 9,180 0.1
UNITED STATES     851,909 7.3
  252,790 Fixed Income Clearing Corporation 252,790 2.2
  2,179 Harman Intl Industries Inc. 231,846 2.0
  2,896 Vanguard MSCI EAFE ETF 119,518 1.0
  1,636 Vanguard MSCI Pacific ETF 96,688 0.8
  3,373 Tumi Holdings Inc. 76,331 0.7
  1,355 TIBCO Software Inc. 27,534 0.2
  2,212 Ruckus Wireless, Inc. 26,898 0.2
  248 Philip Morris Intl Inc. 20,304 0.2
Total Equities     10,751,806 92.0
Cash, Other Assets less Liabilities     923,658 8.0
Grand Total     11,675,464 100.0

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.