An All-Cap Foreign Manager
Neuberger Berman International Equity Fund
Author: Dave Jennings
Last Update: , : For complete profile and charts on Neuberger Berman International Equity Fund
|If looking for the next Microsoft in the U.S. market seems difficult, what about finding it overseas, not to mention its 'small-cap equivalent'? That's what Ben Segal of Neuberger Berman International Equity Fund does and thinks rewards are far from scarce in Spain, Italy, and Canada.
||Neuberger Berman International Equity Fund|
We’re at weight the drug makers. We're more overweight the products and services companies. We're invested in a hospital management firm in Australia. We're invested in Smith and Nephew, based in the UK, which makes artificial knees and hips. Trauma devices have been a rapidly growing market.
Q: You have roughly 80 companies in the fund. What percentage of stocks does that represent?
We count about 19,000 to 20,000 companies.
Q: Your screening methods have to narrow that down. What is the average number that you watch constantly?
We tend to keep our eyes on about 200 companies at any one moment in time. For every stock in the portfolio, there are one or two others that we're looking at. If the one in the portfolio appreciates, maybe we'll substitute that with one of the others. It's like an iceberg.
Q: All portfolios sell for some reason. Yours is about 63%. Is that normal?
As you know, markets have been fairly volatile, and we've been taking advantage of depressed price levels to load up on some stocks that we particularly like. When stocks get individually extended, we've been paring back. There has been a lot of trading around core positions of stocks in the portfolio and less straight substitution of individual names. Our style is not to blow into a company with a 2% weighting and then blow out again six months later. Our style is to take a 50, 75, 100 basis point position, add to it a little bit over time at attractive prices, sell some at other intervals at what we think are over extended prices, and manage the stocks in a much more incremental fashion.
Q: Looking at the graph, the chart has leveled off in the last few months, despite the fear in the world; it's not the best time to think about selling short.
I have a lot of friends in the hedge fund community and some of them take very strong views. Relative to where we were in the heyday of 1998 to 2000, I think the people looking to short have much less conviction over the positions they're taking. It's not as obvious that individual stocks are overvalued. We come off the highs. Who’s to say whether the U.S. economy is going to get slightly weaker or slightly stronger. I don't think anyone is arguing that it's gong to get much stronger or much weaker. So, the investment case of people looking to short - they certainly don't have the conviction that they would have had a year or two ago.
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