Section Hero Funds

International Opportunities Fund

International Opportunities Fund

2Q19 Commentary1

The second quarter of 2019 was a highly volatile period. In April, global equity markets rose significantly on the back of strong corporate earnings reports and consistently dovish messaging from Federal Reserve policymakers. May was a different story altogether. Risk assets sold off sharply, due primarily to a breakdown in U.S. and Chinese trade negotiations and the announcement of tariffs on Mexican goods, which caught investors by surprise. June then brought a resolution to the Mexican tariff situation, a Federal Reserve meeting which indicated some willingness to cut interest rates in July, and the highly anticipated Trump/Xi G-20 meeting, where the two leaders agreed to restart trade talks, avoid imposing new tariffs, and ease restrictions on U.S. companies trading with Chinese technology company Huawei.


For the quarter, the NASDAQ Composite Index2 gained +3.87% while Japan's Nikkei 225 Index2 rose +0.52% (in local currency). Equities in Europe were a bright spot as the MSCI Euro Inde
x2 was up +5.85%, however the MSCI China Index2 lagged other major indexes, returning -4.02%. The MSCI Emerging Markets Index2 gained +0.61% during the period.


In terms of the underlying dynamics of equity market performance, growth stocks were more than double that of value stocks, as the MSCI EAFE Growth Index2 and the MSCI EAFE Value Index2 posted returns of +5.73% and +1.54%, respectively.


The Marsico International Opportunities Fund posted a return of +5.42% for the second quarter and outperformed its benchmark, the MSCI EAFE Index2, which returned +3.68%.


Primary Contributors5: Stock selection and an overweight allocation to the Information Technology sector4 was the largest contributor to performance in the quarter. Stock selection was also strong in the Communication Services, Consumer Staples and Health Care sectors. 


Primary Detractors5: Stock selection in the Consumer Discretionary sector was the largest detractor from performance in the quarter. Stock selection was also weak in the Industrials sector which dampened returns.  

  

For more information, please click here for the Marsico International Opportunities Fund Quarterly Investment Update.


Performance data quoted represents past performance. Past performance is no guarantee of future results. A Fund's performance, especially for short time periods, should not be the sole factor in making an investment decision. Please keep in mind that our views on investments discussed herein are subject to change at any time and the holdings represented here do not represent all of the securities purchased, sold, or recommended by Marsico Capital Management, LLC ("MCM"). Certain less-material factors may not be presented.

2 The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Growth Index captures large and mid-cap securities exhibiting overall growth style characteristics across Developed Markets countries around the world, excluding the US and Canada. The growth investment style characteristics for index construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend. The MSCI EAFE Value Index captures large and mid-cap securities exhibiting overall value style characteristics across Developed Markets countries around the world, excluding the US and Canada. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. The NASDAQ Composite Index is the market capitalization-weighted index of approximately 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests. The index includes all Nasdaq-listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debenture securities. The Nikkei 225 Stock Average Index is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange, excluding ETFs, REITs, preferred equity contribution securities, and tracking stocks (on subsidiary dividend) etc. other than common stocks. Sources of foreign exchange rates may be different between a portfolio and the benchmarks. The MSCI Euro Index captures large cap representation across the 10 Developed Markets countries in the EMU. With 123 constituents, the index covers approximately 70% of the free float-adjusted market capitalization of the EMU. The MSCI China Index captures large and mid cap representation across China H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). With 153 constituents, the index covers about 85% of the China equity universe. The MSCI Emerging Markets (EM) Index captures large and mid-cap representation across 24 Emerging Markets (EM) countries. With 846 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The indexes mentioned above are unmanaged and not available for direct investment. For comparison purposes, it should be noted that the indexes do not charge fees and have no expenses. Sources of foreign exchange rates may be different be­tween a portfolio and the benchmarks. The indexes mentioned above are unmanaged and not available for direct investment. For comparison purposes, it should be noted that the indexes do not charge fees and have no expenses.

3 Sector and industry weightings are determined using the Global Industry Classification Standard (“GICS”). GICS was developed by and is the exclusive property and service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s (“S&P”), and is licensed for use by MCM. Neither MSCI, S&P, MCM, nor any third party involved in compiling GICS makes any express or implied warranties or representations with respect to such standard or classification (or the results from 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 such standard or classification. MSCI, S&P, and MCM, and any of their affiliates or third parties involved in compiling GICS shall not 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.

4Source: UMB Fund Services, Inc., FactSet and Marsico Capital Management, LLC (“MCM”). Data shown such as portfolio holdings, percentages, country, and sector weightings generally applied on the date shown above, and may have changed substantially since then. References to specific securities and sectors are not recommendations to buy or sell such securities or related investments.

Investment Insights and Performance

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The International Opportunities Fund may, at times, experience higher-than-average portfolio turnover which may generate significant taxable gains and increased trading expenses which in turn may lower the Fund’s return.

Past performance is no guarantee of future results. Recent performance may have been negative.

UMB Distribution Services, LLC, is the distributor of The Marsico Investment Fund. Check the background of UMB Distribution Services on FINRA's BrokerCheck.

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