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
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):
$148.5 million as of 6/30/2016
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 
Fund Spotlight
Rupal Bhansali shares stock picks, where she finds value in China, and why currency volatility should be a priority for you.
 

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
  • 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 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:
    A team of three 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, sector weights at the higher of 25% or 1.5x benchmark, hedge currency if practical and cost-efficient
  • Benefit:
    Designed to generate superior long-term, risk-adjusted performance

Ariel International Fund

Sector Weightings (%)

As of June 30, 2016
  Ariel International Fund MSCI EAFE MSCI ACWI ex-US
Information Technology 22.19 5.35 8.93
Telecommunication Services 14.60 5.15 5.31
Consumer Staples 14.45 13.33 11.66
Financials 13.41 22.34 24.44
Health Care 13.35 12.38 9.41
Consumer Discretionary 13.21 12.11 11.34
Energy 3.80 5.21 6.86
Utilities 3.70 3.92 3.61
Industrials 0.93 13.33 11.31
Materials 0.36 6.88 7.15

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)Performance

As of June 30, 2016
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Since
Inception
Ariel International Fund -0.71% -1.42% -0.16% -3.05% 5.81% 6.64%
MSCI EAFE -3.36% -1.46% -4.42% -10.16% 2.06% 5.98%
MSCI ACWI ex-US -1.53% -0.64% -1.02% -10.24% 1.16% 4.31%

Ariel International Fund (Investor Class)Performance

As of June 30, 2016
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Since
Inception
Ariel International Fund -0.71% -1.42% -0.16% -3.05% 5.81% 6.64%
MSCI EAFE -3.36% -1.46% -4.42% -10.16% 2.06% 5.98%
MSCI ACWI ex-US -1.53% -0.64% -1.02% -10.24% 1.16% 4.31%
Expense Cap as of 2/1/14: 1.25%*
Net Expense Ratio as of the fiscal year ended 9/30/15: 1.26%*
Gross Expense Ratio as of the fiscal year ended 9/30/15: 3.49%*

*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, 2017. For the year ended September 30, 2015, the net expense ratio of the Fund rounded above the Expense Cap due to interest expense which is excluded from the expense reimbursement. The Expense Cap prior to February 1, 2014 was 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 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 International Fund

Schedule of Holdings

As of June 30, 2016
  Units Security Description Market Value % of Total Value
CANADA     2,028,576 1.4
  38,800 IGM Financial Inc. 1,056,230 0.7
  18,107 Rogers Communications Inc. 732,997 0.5
  8,628 Suncor Energy, Inc. 239,349 0.2
CHINA     12,501,643 8.4
  103,020 China Mobile Ltd. ADR 5,964,858 4.0
  27,636 Baidu, Inc. ADR 4,564,085 3.1
  157,500 China Mobile Ltd. 1,801,746 1.2
  284,000 Lenovo Group Ltd. 170,954 0.1
FINLAND     6,753,918 4.5
  1,158,638 Nokia Corp. ADR 6,592,650 4.4
  28,466 Nokia Corp. 161,268 0.1
FRANCE     6,814,637 4.7
  44,609 Michelin (CGDE) 4,218,307 2.9
  35,422 BNP Paribas SA 1,562,752 1.1
  7,686 Euler Hermes Group 641,933 0.4
  3,752 L'Air Liquide SA 391,645 0.3
GERMANY     19,171,812 12.9
  89,319 Deutsche Boerse AG 7,289,414 4.9
  212,569 Dialog Semiconductor plc 6,324,437 4.3
  1,079,140 Telefonica Deutschland Holding 4,422,647 3.0
  7,774 Beiersdorf AG 732,363 0.5
  4,502 SAP SE 335,538 0.2
  885 BASF SE 67,413 0.0
HONG KONG     1,016,673 0.7
  2,103,321 Li & Fung Ltd. 1,016,673 0.7
IRELAND     472,872 0.3
  6,800 Ryanair Holdings plc ADR 472,872 0.3
ITALY     2,072,883 1.4
  325,367 Snam SpA 1,935,368 1.3
  2,253 DiaSorin SpA 137,515 0.1
JAPAN     19,005,672 12.8
  26,900 Shimamura Co., Ltd. 3,954,312 2.7
  22,200 Nintendo Co., Ltd. 3,135,496 2.1
  16,500 Daito Trust Construction Co., Ltd. 2,658,790 1.8
  71,100 Canon Inc. 2,005,314 1.4
  147,800 Nikon Corp. 1,983,739 1.3
  27,200 Toyota Motor Corp. 1,330,697 0.9
  10,433 Toyota Motor Corp. ADR 1,043,196 0.7
  175,400 Anritsu Corp. 1,000,442 0.7
  23,800 Japan Tobacco Inc. 945,639 0.6
  17,201 Canon Inc. ADR 492,121 0.3
  2,300 Murata Manufacturing Co., Ltd. 253,464 0.2
  17,900 Japan Exchange Group, Inc. 202,462 0.1
LUXEMBOURG     1,202,533 0.8
  25,972 Tenaris ADR 749,032 0.5
  5,268 RTL Group 431,540 0.3
  268 RTL Group 21,961 0.0
NETHERLANDS     9,931,025 6.7
  308,965 Ahold N.V. 6,823,191 4.6
  51,113 Gemalto N.V. 3,107,834 2.1
SINGAPORE     568,831 0.4
  41,600 United Overseas Bank Ltd. 568,831 0.4
SPAIN     3,671,649 2.5
  138,553 Endesa SA 2,772,278 1.9
  30,285 Tecnicas Reunidas SA 899,371 0.6
SWEDEN     625,318 0.4
  21,463 H&M Hennes & Mauritz AB 625,318 0.4
SWITZERLAND     13,606,260 9.1
  30,477 Roche Holding AG 7,992,995 5.4
  8,376 Swisscom AG 4,140,394 2.8
  41,926 UBS AG 539,693 0.4
  4,648 Nestle SA 357,703 0.2
  131 SGS SA 298,624 0.2
  1,573 Novartis AG ADR 129,788 0.1
  3,771 ABB Ltd. 73,837 0.0
  525 Kuehne & Nagel Intl AG 73,226 0.0
UNITED ARAB EMIRATES     196,401 0.1
  572,516 Dubai Financial Market 196,401 0.1
UNITED KINGDOM     21,313,344 14.4
  327,156 GlaxoSmithKline plc 6,988,021 4.7
  58,315 Reckitt Benckiser Group plc 5,814,625 3.9
  14,735 British American Tobacco plc ADR 1,907,888 1.3
  39,823 GlaxoSmithKline plc ADR 1,725,929 1.2
  233,048 HSBC Holdings plc 1,445,432 1.0
  243,831 British Telecom Group plc 1,330,860 0.9
  24,427 Diageo plc 678,497 0.5
  126,851 Countrywide plc 414,746 0.3
  32,115 IG Group Holdings plc 346,086 0.2
  6,070 BT Group plc ADR 169,050 0.1
  110,235 Hays plc 143,302 0.1
  3,896 Markit Ltd. 127,010 0.1
  29,588 Pagegroup plc 117,025 0.1
  1,418 Rightmove plc 68,864 0.0
  319 Diageo plc ADR 36,009 0.0
UNITED STATES     6,177,207 4.2
  30,166 Harman Intl Industries, Inc. 2,166,522 1.5
  12,310 Core Laboratories N.V. 1,525,086 1.0
  16,955 EOG Resources Inc. 1,414,386 1.0
  10,531 Philip Morris Intl, Inc. 1,071,213 0.7
INVESTMENT COMPANIES     2,037,123 1.3
  52,452 iShares MSCI Switzerland Capped ETF 1,555,202 1.0
  13,629 Vanguard MSCI EAFE ETF 481,921 0.3
Total Equities     129,168,377 87.0
Cash, Other Assets less Liabilities     19,313,418 13.0
Grand Total     148,481,795 100.0

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. 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 investors outside the United States.

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