Why Ariel’s global approach
Experience matters
- Rupal J. Bhansali has more than 30 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
Global all cap, intrinsic value
Investor Class: 12/30/2011
Institutional Class: 12/30/2011
Investor Class: AGLOX
Institutional Class: AGLYX
$159.1 million as of 9/30/2022
Our global investment philosophy
Patience
We take the long-term view.- Emphasis on 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.- Focus on connecting information versus collecting information
- Take business analyst approach rather than financial analyst approach
- Have extensive interactions with management teams around the world
- Research a company's global peers to fully 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
- Team members with defined roles vet each stock
Our global process
Negative Screening
Negative screening seeks downside protection- Process:
Screen on risk, not growth rate or valuation - Risk management:
Eliminate over 60% of high-risk stocks in universe - Benefit:
Position for downside protection
Bottom-up Research
Proprietary bottom-up research enables better stock picking- Process:
Analysts perform fundamental 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:
Team debates and stress tests each idea - Risk management:
Incorporate macro and micro factors in scenario analyses - Benefit:
Ideas vetted from multiple perspectives yield more informed final decisions by portfolio manager(s)
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:
Typically cap security position size at 5% at time of purchase, industry weights at the higher of 25% or 1.5x the benchmark*, hedge currency if practical and cost-efficient - Benefit:
Designed to generate superior long-term, risk-adjusted performance
Ariel Global Fund
Investor Class | AGLOXPerformance
| Inception date: December 30, 2011 | Annualized | |||||||
| One Month |
Three Months |
Year To Date |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception |
|
|---|---|---|---|---|---|---|---|---|
| Ariel Global Fund | 5.91% | -5.07% | -9.74% | -8.01% | 4.53% | 3.87% | 7.54% | 6.84% |
| MSCI ACWI Net Index | 6.03% | -7.65% | -21.14% | -19.96% | 4.84% | 5.24% | 7.98% | 8.49% |
| MSCI ACWI Value Net Index | 8.48% | -3.65% | -12.19% | -10.29% | 3.30% | 3.12% | 6.25% | 6.83% |
Ariel Global Fund
Investor Class | AGLOXPerformance
| Inception date: December 30, 2011 | Annualized | |||||||
| One Month |
Three Months |
Year To Date |
One Year |
Three Years |
Five Years |
Ten Years |
Since Inception |
|
|---|---|---|---|---|---|---|---|---|
| Ariel Global Fund | -7.16% | -10.05% | -14.78% | -9.99% | 2.83% | 2.43% | 6.80% | 6.32% |
| MSCI ACWI Net Index | -9.57% | -6.82% | -25.63% | -20.66% | 3.75% | 4.44% | 7.28% | 7.96% |
| MSCI ACWI Value Net Index | -8.67% | -7.66% | -19.05% | -13.97% | 1.27% | 1.71% | 5.39% | 6.07% |
Gross Expense Ratio as of the fiscal year ended 9/30/21: 1.36%*
*Effective November 29, 2016, Ariel Investments, LLC, the Adviser, has contractually agreed to waive fees and reimburse expenses (the “Expense Cap”) in order to limit Ariel Global Fund’s total annual operating expenses to 1.13% of net assets for the Investor Class through the end of the fiscal year ending September 30, 2023. Prior to November 29, 2016, the Expense Cap was 1.25% for the Investor Class. Through January 31, 2014, the Expense Cap was 1.40% for the Investor Class. The Expense Cap has been lowered over time. Contact us for historical information about the Expense Cap.
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 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. Ariel Global Fund is often concentrated in fewer sectors than its benchmark, and its performance may suffer if these sectors underperform the overall stock market. Investing in equity stocks is risky and subject to the volatility of the markets.
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.
The MSCI ACWI (All Country World Index) Index is an unmanaged, market weighted index of global developed and emerging markets. The MSCI ACWI Value Index captures large and mid cap securities exhibiting overall value style characteristics across 23 Developed Markets countries and 25 Emerging Markets (EM) countries. Investors cannot invest directly in an index. All MSCI Index net returns reflect the reinvestment of income and other earnings, including the dividends net of the maximum withholding tax applicable to non-resident institutional investors that do not benefit from double taxation treaties. MSCI uses the maximum tax rate applicable to institutional investors, as determined by the companies’ country of incorporation. 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. Source: MSCI.
Click here for a fund prospectus.
Sector Weightings (%)
| Ariel Global Fund | MSCI ACWI | |
|---|---|---|
| Health Care | 25.01 | 12.89 |
| Information Technology | 15.55 | 20.76 |
| Financials | 13.85 | 14.55 |
| Communication Services | 10.76 | 7.33 |
| Consumer Staples | 10.63 | 7.65 |
| Consumer Discretionary | 7.08 | 11.58 |
| Utilities | 4.92 | 3.14 |
| Real Estate | 4.56 | 2.69 |
| Industrials | 1.18 | 9.49 |
| Materials | 0.00 | 4.69 |
| Energy | 0.00 | 5.21 |
Sector weightings are calculated based on equity holdings as a percentage of total net assets.
MSCI ACWI (All Country World Index) Index 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.
Schedule of Holdings
| Units | Security Description | Market Value | % of Total Value | |
|---|---|---|---|---|
| BELGIUM | 286,859 | 0.2 | ||
| 6,045 | KBC Group NV | 286,859 | 0.2 | |
| BRAZIL | 6,333,136 | 3.9 | ||
| 693,364 | BB Seguridade Participacoes SA | 3,415,181 | 2.1 | |
| 201,362 | Telefonica Brasil SA | 1,511,423 | 0.9 | |
| 628,090 | TIM SA | 1,406,532 | 0.9 | |
| CANADA | 133,317 | 0.1 | ||
| 11,298 | Element Fleet Management Corp. | 133,317 | 0.1 | |
| CHILE | 293,019 | 0.2 | ||
| 20,915 | Banco Santander-Chile ADR | 293,019 | 0.2 | |
| CHINA | 9,325,848 | 5.9 | ||
| 70,794 | Baidu, Inc. ADR | 8,317,587 | 5.2 | |
| 484,831 | TravelSky Technology, Ltd. | 742,070 | 0.5 | |
| 9,747 | Trip.com Group, Ltd. ADR | 266,191 | 0.2 | |
| DENMARK | 298,081 | 0.2 | ||
| 93,261 | H Lundbeck A/S, Class B | 298,081 | 0.2 | |
| FINLAND | 2,588,497 | 1.6 | ||
| 602,949 | Nokia Corp. | 2,588,497 | 1.6 | |
| FRANCE | 8,969,832 | 5.6 | ||
| 236,695 | Michelin (CGDE) | 5,303,317 | 3.3 | |
| 25,963 | Sanofi | 1,976,992 | 1.2 | |
| 33,125 | BNP Paribas SA | 1,399,175 | 0.9 | |
| 3,191 | Safran SA | 290,348 | 0.2 | |
| GERMANY | 7,308,531 | 4.7 | ||
| 31,720 | Deutsche Boerse AG | 5,199,757 | 3.3 | |
| 5,634 | Muenchener Rueckver AG | 1,356,220 | 0.9 | |
| 372,216 | Telefonica Deutschland Holding | 752,554 | 0.5 | |
| HONG KONG | 1,511,548 | 1.0 | ||
| 200,000 | CLP Holdings, Ltd. | 1,511,548 | 1.0 | |
| ITALY | 1,664,505 | 1.0 | ||
| 323,326 | Snam SpA | 1,306,862 | 0.8 | |
| 77,016 | Italgas SpA | 357,643 | 0.2 | |
| JAPAN | 6,732,176 | 4.2 | ||
| 183,100 | Subaru Corp. | 2,767,070 | 1.7 | |
| 69,200 | Bridgestone Corp. | 2,237,991 | 1.4 | |
| 26,100 | Secom Co., Ltd. | 1,488,199 | 0.9 | |
| 3,600 | Mabuchi Motor Co., Ltd. | 97,746 | 0.1 | |
| 3,500 | Nintendo Co., Ltd. | 141,170 | 0.1 | |
| LUXEMBOURG | 159,378 | 0.1 | ||
| 5,037 | RTL Group | 159,378 | 0.1 | |
| MEXICO | 245,045 | 0.2 | ||
| 69,675 | Wal-Mart de Mexico SAB de CV | 245,045 | 0.2 | |
| NETHERLANDS | 1,101,105 | 0.7 | ||
| 43,229 | Koninklijke Ahold Delhaize NV | 1,101,105 | 0.7 | |
| PERU | 5,516,176 | 3.5 | ||
| 44,920 | Credicorp, Ltd. | 5,516,176 | 3.5 | |
| SOUTH AFRICA | 121,370 | 0.1 | ||
| 42,909 | Sanlam, Ltd. | 121,370 | 0.1 | |
| SOUTH KOREA | 4,455,078 | 2.8 | ||
| 73,784 | KT&G Corp. | 4,455,078 | 2.8 | |
| SPAIN | 4,651,453 | 2.9 | ||
| 309,693 | Endesa SA | 4,651,453 | 2.9 | |
| SWITZERLAND | 11,794,843 | 7.5 | ||
| 32,606 | Roche Holding AG | 10,614,322 | 6.7 | |
| 7,997 | Novartis AG | 609,667 | 0.4 | |
| 5,278 | Nestle SA | 570,854 | 0.4 | |
| TAIWAN | 850,174 | 0.5 | ||
| 157,000 | Catcher Technology Co., Ltd. | 850,174 | 0.5 | |
| UNITED KINGDOM | 12,618,538 | 7.9 | ||
| 485,319 | GSK plc | 7,009,321 | 4.4 | |
| 1,342,071 | Direct Line Insurance Group plc | 2,768,905 | 1.7 | |
| 484,384 | Haleon plc | 1,510,293 | 0.9 | |
| 22,215 | Admiral Group plc | 471,927 | 0.3 | |
| 313,480 | Vodafone Group plc | 350,847 | 0.2 | |
| 3,714 | Reckitt Benckiser Group plc | 246,170 | 0.2 | |
| 12,988 | Vodafone Group plc ADR | 147,154 | 0.1 | |
| 11,068 | Close Brothers Group plc | 113,921 | 0.1 | |
| UNITED STATES | 61,827,421 | 38.8 | ||
| 58,732 | Microsoft Corp. | 13,678,683 | 8.6 | |
| 150,305 | Gilead Sciences, Inc. | 9,272,315 | 5.8 | |
| 105,760 | Philip Morris International, Inc. | 8,779,138 | 5.5 | |
| 297,623 | Equity Commonwealth | 7,250,096 | 4.6 | |
| 39,252 | Johnson & Johnson | 6,412,207 | 4.0 | |
| 114,022 | Verizon Communications, Inc. | 4,329,415 | 2.7 | |
| 50,498 | Bristol-Myers Squibb Co. | 3,589,903 | 2.3 | |
| 39,738 | Amdocs, Ltd. | 3,157,184 | 2.0 | |
| 41,033 | NetApp, Inc. | 2,537,891 | 1.6 | |
| 10,504 | Check Point Software Technologies, Ltd. | 1,176,658 | 0.7 | |
| 24,350 | Tapestry, Inc. | 692,271 | 0.4 | |
| 12,702 | U.S. Bancorp | 512,145 | 0.3 | |
| 1,646 | Berkshire Hathaway, Inc., Class B | 439,515 | 0.3 | |
| Total Equities | 148,785,930 | 93.6 | ||
| Short Term Investments | ||||
| 5,621,741 | Northern Institutional Treasury Portfolio | 5,621,741 | 3.5 | |
| Foreign Currency and Other Assets less Liabilities | 4,669,085 | 2.9 | ||
| Grand Total | 159,076,756 | 100.0% | ||