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Intrinsic Value Global Strategy
Ariel International Fund

Why Ariel’s global approach


Experience matters

  • Rupal J. Bhansali has more than 25 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
Investment Style:
International all cap, intrinsic value
Inception:
Investor Class: 12/30/2011
Institutional Class: 12/30/2011
Number of companies: 50-150
Turnover: typically 30-80%
Ticker Symbol:
Investor Class: AINTX
Institutional Class: AINIX
Fund Assets (all classes):
$641.0 million as of 12/31/2018
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 
Fund Spotlight
Meet Rupal J. Bhansali and hear her philosophy on global investing.
 

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


 
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 seeks downside protection
  • Process:
    Screen on risk, not growth rate or valuation
  • Risk management:
    Eliminate approximately 60% of high-risk stocks in universe
  • Benefit:
    Position for 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:
    Team debates and stress tests each idea
  • Risk management:
    Incorporate macro and micro factors in scenario analyses; lead analyst presents balanced case versus a recommendation
  • 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:
    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


You may also be interested in
Ariel Investments Director of Research for International & Global Equities Chaim Schneider discusses the research process for the Ariel Global Strategy.
Portfolio Manager Rupal Bhansali shares her unique approach to managing risk.
 
Ariel International Fund

Sector Weightings (%)

As of December 31, 2018
  Ariel International Fund MSCI EAFE MSCI ACWI ex-US
Communication Services 27.21 5.55 7.65
Health Care 14.53 11.14 8.35
Consumer Staples 13.85 11.61 9.89
Financials 9.90 19.49 22.18
Information Technology 9.24 5.96 7.90
Energy 9.05 5.86 7.30
Consumer Discretionary 8.46 11.23 10.58
Utilities 3.73 3.76 3.40
Industrials 3.37 14.31 11.72
Real Estate 0.65 3.73 3.36
Materials 0.00 7.37 7.68

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

Investor Class | AINTX

Performance

As of January 31, 2019
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Since
Inception
Ariel International Fund 6.33% 2.33% 6.33% -8.54% 4.61% 3.15% 5.69%
MSCI EAFE 6.57% 1.27% 6.57% -12.51% 7.74% 2.66% 6.63%
MSCI ACWI ex-US 7.56% 3.66% 7.56% -12.58% 9.59% 3.11% 5.87%

Ariel International Fund

Investor Class | AINTX

Performance

As of December 31, 2018
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Since
Inception
Ariel International Fund -5.13% -9.23% -9.81% -9.81% 1.34% 1.13% 4.84%
MSCI EAFE -4.85% -12.54% -13.79% -13.79% 2.87% 0.53% 5.75%
MSCI ACWI ex-US -4.53% -11.46% -14.20% -14.20% 4.48% 0.68% 4.85%
Expense Ratio Cap: 1.13%*
Gross Expense Ratio as of the fiscal year ended 9/30/18: 1.31%*

*Effective November 29, 2016, 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 1.13% of net assets for the Investor Class through the end of the fiscal year ending September 30, 2020. 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. 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 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. 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 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. 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 Distributors, LLC is a member of the Securities Investor Protection Corporation.



Ariel International Fund

Schedule of Holdings

As of December 31, 2018
  Units Security Description Market Value % of Total Value
BELGIUM     426,895 0.1
  4,625 Galapagos N.V. 426,895 0.1
CANADA     7,465,581 1.1
  177,214 IGM Financial, Inc. 4,027,945 0.6
  59,508 Suncor Energy, Inc. 1,662,057 0.3
  20,361 Magna International, Inc. 924,239 0.1
  57,395 Hydro One Ltd. 851,340 0.1
CHINA     56,071,523 8.7
  3,271,000 China Mobile Ltd. 31,475,621 4.9
  105,487 Baidu, Inc. ADR 16,730,238 2.6
  163,868 China Mobile Ltd. ADR 7,865,664 1.2
FINLAND     20,370,751 3.2
  3,500,129 Nokia Corp. ADR 20,370,751 3.2
FRANCE     34,618,859 5.4
  264,694 Michelin (CGDE) 26,293,784 4.1
  48,053 Safran SA 5,802,979 0.9
  21,581 Thales SA 2,522,096 0.4
GERMANY     65,528,184 10.2
  364,259 Deutsche Boerse AG 43,549,113 6.8
  5,052,049 Telefonica Deutschland Holding 19,884,468 3.1
  80,830 Dialog Semiconductor plc 2,094,603 0.3
HONG KONG     2,805,305 0.4
  17,859,302 Li & Fung Ltd. 2,805,305 0.4
ITALY     25,015,121 3.9
  5,123,718 Snam SpA 22,433,508 3.5
  274,705 Italgas SpA 1,575,304 0.2
  91,887 Azimut Holdings SpA 1,006,309 0.2
JAPAN     113,527,051 17.6
  1,004,900 NTT DOCOMO, Inc. 22,579,326 3.5
  75,000 Nintendo Co., Ltd. 19,915,437 3.1
  449,000 Nippon Telegraph & Telephone Corp. 18,318,896 2.9
  734,000 Japan Tobacco, Inc. 17,440,646 2.7
  116,600 Shimamura Co., Ltd. 8,928,714 1.4
  405,200 Subaru Corp. 8,656,440 1.3
  1,760,700 Seven Bank Ltd. 5,026,178 0.8
  27,900 Daito Trust Construction Co., Ltd. 3,819,608 0.6
  122,400 Mabuchi Motor Co., Ltd. 3,749,471 0.6
  25,100 Secom Co., Ltd. 2,082,059 0.3
  77,100 Ono Pharmaceutical Co., Ltd. 1,574,436 0.2
  17,000 Bridgestone Corp. 652,219 0.1
  5,600 Toyota Motor Corp. 324,165 0.1
  12,700 Askul Corp. 270,806 0.0
  1,400 Murata Manufacturing Co., Ltd. 188,650 0.0
LUXEMBOURG     7,376,658 1.2
  69,761 RTL Group 3,738,528 0.6
  170,644 Tenaris ADR 3,638,130 0.6
NETHERLANDS     60,311,619 9.4
  1,240,514 Koninklijke Ahold Delhaize N.V. 31,375,617 4.9
  498,521 Gemalto N.V. 28,936,002 4.5
PORTUGAL     122,771 0.0
  10,363 Jeronimo Martins SGPS SA 122,771 0.0
SINGAPORE     1,557,530 0.2
  296,900 Singapore Exchange Ltd. 1,557,530 0.2
SPAIN     23,288,473 3.6
  598,757 Endesa SA 13,809,701 2.1
  387,675 Tecnicas Reunidas SA 9,478,772 1.5
SWITZERLAND     66,336,401 10.5
  170,491 Roche Holding AG 42,325,902 6.6
  38,446 Swisscom AG 18,376,299 2.9
  14,288 Kuehne & Nagel Intl, AG 1,839,247 0.3
  141,819 UBS AG 1,768,943 0.3
  7,389 Novartis AG 634,050 0.1
  274 SGS SA 616,780 0.1
  16,340 ams AG 393,471 0.1
  4,703 Nestle SA 381,709 0.1
UNITED ARAB EMIRATES     877,383 0.1
  4,048,694 Dubai Financial Market 877,383 0.1
UNITED KINGDOM     58,378,843 9.1
  1,975,041 GlaxoSmithKline plc 37,539,282 5.8
  162,052 Reckitt Benckiser Group plc 12,419,941 1.9
  570,219 National Grid plc 5,554,215 0.9
  61,264 GlaxoSmithKline plc ADR 2,340,897 0.4
  198,317 Kingfisher plc 524,508 0.1
UNITED STATES     39,746,707 6.3
  286,134 Philip Morris Intl, Inc. 19,102,306 3.0
  71,268 EOG Resources, Inc. 6,215,282 1.0
  41,734 Pioneer Natural Resources Co. 5,488,856 0.9
  65,864 Core Laboratories N.V. 3,929,446 0.6
  94,249 Fluor Corp. 3,034,818 0.5
  38,511 Fabrinet 1,975,999 0.3
INVESTMENT COMPANIES     6,918,000 1.1
  186,469 Vanguard FTSE Developed Markets ETF 6,918,000 1.1
Total Equities     590,743,655 92.1
Short Term Investments      
  18,973,459 Northern Institutional Treasury Portfolio 18,973,459 3.0
Foreign Currency and Other Assets less Liabilities 31,245,579 4.9
Grand Total     640,962,693 100.0%



Ariel International Fund

Fund Materials

 
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. This website and all of its content is for informational and educational purposes only and should not be considered to be investment advice or a recommendation to buy or sell any particular security. The mutual funds offered by Ariel Investment Trust are distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC. Use of this website is subject to our Terms & Conditions. The Ariel mutual funds 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 ineligible investors, investors for whom such products, funds or services are not suitable, or investors outside the United States.

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