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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
Market Cap: All cap
Inception:
Investor Class: 12/30/2011
Institutional Class: 12/30/2011
Number of companies: 50-150
Turnover: typically 25-40%
Ticker Symbol:
Investor Class: AINTX
Institutional Class: AINIX
Fund Assets (all classes):
$873.6 million as of 6/30/2021
 
Portfolio Manager
Bhansali_Rupal_Web.png Rupal J. Bhansali
Portfolio Manager
 

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


*Global concentrated typically owns up to 15% at market and has no industry limits.


Ariel International Fund

Sector Weightings (%)

As of June 30, 2021
  Ariel International Fund MSCI EAFE MSCI ACWI ex-US
Health Care 16.94 12.41 9.28
Communication Services 16.69 4.89 6.72
Consumer Staples 14.93 10.52 8.51
Consumer Discretionary 12.96 13.03 13.81
Utilities 11.61 3.40 2.98
Financials 10.65 16.96 18.60
Information Technology 2.89 9.14 12.93
Industrials 2.33 15.50 11.79
Real Estate 0.74 3.03 2.55
Energy 0.74 3.22 4.54
Materials 0.00 7.91 8.30

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 August 31, 2021
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Since
Inception
Ariel International Fund 1.12% 0.13% 5.55% 10.47% 4.98% 4.98% 6.09%
MSCI EAFE 1.76% 1.38% 11.58% 26.12% 9.00% 9.72% 8.35%
MSCI ACWI ex-US 1.90% -0.43% 9.40% 24.87% 9.37% 9.92% 7.70%

Ariel International Fund

Investor Class | AINTX

Performance

As of June 30, 2021
Inception date: December 30, 2011 Annualized
  One
Month
Three
Months
Year
To Date
One
Year
Three
Years
Five
Years
Since
Inception
Ariel International Fund 0.07% 5.34% 5.48% 16.93% 5.41% 5.80% 6.20%
MSCI EAFE -1.13% 5.17% 8.83% 32.35% 8.27% 10.28% 8.22%
MSCI ACWI ex-US -0.65% 5.48% 9.16% 35.72% 9.38% 11.08% 7.82%
Expense Ratio Cap: 1.13%
Gross Expense Ratio as of the fiscal year ended 9/30/20: 1.33%*

*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 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, 2022. Prior to November 29, 2016, the Expense Cap was 1.25% of net assets 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 International Fund is often concentrated in fewer sectors than its benchmarks, 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.

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.

Click here for a fund prospectus.



Ariel International Fund

Schedule of Holdings

As of June 30, 2021
  Units Security Description Market Value % of Total Value
BELGIUM     5,066,930 0.6
  66,457 KBC Group NV 5,066,930 0.6
BRAZIL     6,780,569 0.8
  797,714 Telefonica Brasil SA ADR 6,780,569 0.8
CANADA     3,832,062 0.5
  189,871 Element Fleet Management Corp. 2,214,855 0.3
  45,811 IGM Financial, Inc. 1,617,207 0.2
CHILE     63,663 0.0
  3,204 Banco Santander-Chile ADR 63,663 0.0
CHINA     44,709,894 5.1
  210,763 Baidu, Inc. ADR 42,974,576 4.9
  246,958 TravelSky Technology Ltd. 533,082 0.1
  33,904 Trip.com Group Ltd. ADR 1,202,236 0.1
DENMARK     10,833,941 1.2
  107,735 Novo Nordisk A/S 9,025,947 1.0
  56,834 H Lundbeck A/S 1,807,994 0.2
FINLAND     18,496,014 2.1
  2,455,749 Nokia Corp. 13,148,706 1.5
  1,005,133 Nokia Corp. ADR 5,347,308 0.6
FRANCE     74,916,614 8.6
  291,530 Michelin (CGDE) 46,494,193 5.3
  109,004 Sanofi 11,420,663 1.3
  61,802 Thales SA 6,305,160 0.7
  113,710 Vivendi SA 3,819,781 0.4
  50,904 BNP Paribas SA 3,191,203 0.4
  16,556 Safran SA 2,295,289 0.3
  20,009 Societe BIC SA 1,390,325 0.2
GERMANY     91,696,428 10.6
  328,472 Deutsche Boerse AG 57,332,297 6.6
  9,220,418 Telefonica Deutschland Holding 24,326,174 2.8
  28,085 Muenchener Rueckversicherungs-Gesellschaft AG 7,691,049 0.9
  28,259 Fresenius Medical Care AG & Co. KGaA 2,346,908 0.3
HONG KONG     10,880,569 1.2
  1,100,000 CLP Holdings Ltd. 10,880,569 1.2
ITALY     46,600,392 5.4
  6,889,656 Snam SpA 39,825,876 4.6
  893,102 Italgas SpA 5,837,185 0.7
  96,355 Banca Mediolanum SpA 937,331 0.1
JAPAN     162,666,661 18.6
  89,400 Nintendo Co., Ltd. 52,000,792 6.0
  1,758,700 Subaru Corp. 34,692,750 4.0
  612,200 Bridgestone Corp. 27,856,078 3.2
  1,206,800 Japan Tobacco, Inc. 22,795,534 2.6
  136,000 Secom Co., Ltd. 10,336,955 1.2
  59,500 Daito Trust Construction Co., Ltd. 6,507,269 0.7
  116,700 Sankyo Co., Ltd. 2,980,133 0.3
  79,100 Nippon Telegraph & Telephone Corp. 2,060,893 0.2
  55,800 KDDI Corp. 1,740,375 0.2
  76,000 Ono Pharmaceutical Co., Ltd. 1,695,882 0.2
LUXEMBOURG     3,062,555 0.4
  51,399 RTL Group 3,062,555 0.4
NETHERLANDS     44,967,485 5.1
  1,512,694 Koninklijke Ahold Delhaize N.V. 44,967,485 5.1
PERU     4,873,951 0.6
  40,244 Credicorp Ltd. 4,873,951 0.6
PORTUGAL     1,858,826 0.2
  101,927 Jeronimo Martins SGPS SA 1,858,826 0.2
SINGAPORE     1,180,605 0.1
  142,000 Singapore Exchange Ltd. 1,180,605 0.1
SPAIN     37,929,400 4.3
  1,298,508 Endesa SA 31,502,385 3.6
  507,986 Tecnicas Reunidas SA 6,427,015 0.7
SWITZERLAND     83,582,349 9.6
  173,996 Roche Holding AG 65,545,859 7.5
  57,077 Nestle SA 7,107,714 0.8
  72,857 Novartis AG 6,639,613 0.8
  6,291 Swisscom AG 3,591,360 0.4
  7,648 Novartis AG ADR 697,803 0.1
UNITED KINGDOM     76,437,559 8.7
  2,460,258 GlaxoSmithKline plc 48,306,090 5.5
  1,050,494 National Grid plc 13,380,592 1.5
  1,753,567 Direct Line Insurance Group plc 6,913,272 0.8
  3,225,751 Vodafone Group plc 5,414,412 0.6
  95,690 St. James's Place plc 1,955,075 0.2
  7,815 AstraZeneca plc ADR 468,118 0.1
UNITED STATES     59,909,843 6.8
  541,642 Philip Morris Intl, Inc. 53,682,139 6.1
  53,627 Check Point Software Technologies Ltd. 6,227,704 0.7
Total Equities     790,346,310 90.5
Short Term Investments      
  50,850,621 Northern Institutional Treasury Portfolio 50,850,621 5.8
Foreign Currency and Other Assets less Liabilities 32,450,390 3.7
Grand Total     873,647,321 100.0%



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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