Kiplinger\'s Personal Finance - 04.2020

04/2020 KIPLINGER’S PERSONAL FINANCE 39

A FEW MONTHS SHORT OF ITS
fifth birthday, ARTISAN DE-
VELOPING WORLD is youthful
by mutual fund standards.
But before taking the helm,
manager Lewis Kaufman
spent a decade managing
foreign-stock strategies at
Thornburg Investment
Management, including
roughly five years running
a diversified emerging-mar-
kets stock fund (also called
Developing World) whose
annualized returns dazzled.
So far, so good for version
2.0: Since its 2015 inception,
Artisan Developing World
has posted an 11.6% annual-
ized return—ahead of the
MSCI index’s 6.2% return
and the 5.5% average gain
among peer funds. (Returns
are through January 31.)
Like many emerging-
markets funds, Developing
World has a big bet on China.
The fund dedicates 35% of

assets to Chinese stocks

(compared with 34% in the

MSCI Emerging Markets in-

dex), favoring firms that will

benefit from the country’s

productive economy and

expand alongside China’s

growing skilled labor force

and middle class.

But an outsize bet on

China has been bad news

for emerging-markets funds

this year. Investors are wor-

ried about the coronavirus

and its impact on businesses

and the economy in China,

as well as ripple effects in

the region. So far in 2020,

emerging-markets funds are

down an average 4.2%.

But Developing World re-

turned 0.5% over the same

period, cushioned in part by

its investments in developed-

country multinational firms.

Firms such as Visa, which

hopes to capitalize on a

global shift to cashless pay-

ments, and Netf lix, with a

subscriber base now more

than half non-American,

benefit from positive trends

in emerging markets but

tend to hold up better when

emerging-markets stocks

hit the skids. Kaufman

says the outbreak is likely

a short-term problem for

Chinese businesses, and

that the government has

shown a quicker and more

thorough response than it

did with SARS.

The rest of the portfolio

is invested in such markets

as Latin America and South-

east Asia. Kaufman doesn’t

expect these economies to

expand rapidly, so he hunts

for firms that provide a

product or service in high

demand in an underserved

market. MercadoLibre, an

e-commerce and mobile

payments business in Latin

America, is a top holding.

RYAN ERMEY

[email protected]

Emerging Challenges

A stake in multinationals buoys this fund when developing markets sink.

SPOTLIGHT: ARTISAN DEVELOPING WORLD

STOCK MUTUAL FUNDS

Rank/Name Symbol 1 yr. 5 yrs.

Assets†

(billions)

Max.

sales

charge

Annualized

total return

1.Vanguard Total Stock Market Idx Adm VTSAX $760.5 20.4% 11.8% none

2.Vanguard 500 Index Adm VFIAX 405.8 21.7 12.3 none

3.Vanguard Total Intl Stock Idx Adm VTIAX 392.1 9.1 5.1 none

4.Fidelity 500 Index Inv FXAIX 236.2 21.7 12.4 none

5.American Growth Fund of America A AGTHX 200.7 18.2 12.9 5.75%

6.American EuroPacific Growth A AEPGX 165.5 13.8 6.2 5.75

7.American Balanced A ABALX 161.2 13.6 8.4 5.75

8.American Washington Mutual A AWSHX 126.7 17.0 11.1 5.75

9.Fidelity Contrafund FCNTX 120.8 21.3 13.9 none

10.American Income Fund of America A AMECX 114.8 13.3 6.9 5.75

S&P 500-STOCK INDEX 21.7% 12.4%

MSCI EAFE INDEX 12.1% 5.1%

20 LARGEST STOCK AND BOND MUTUAL FUNDS Ranked by size. See returns for thousands of funds at kiplinger.com/tools/fundfinder.

BOND MUTUAL FUNDS

Rank/Name Symbol

1-year

total

return

Assets†

(billions)

Max.

sales

charge

Current

yield

1.Vanguard Total Bond Mrkt Idx Adm VBTLX $207.1 9.9% 2.1% none

2.Pimco Income A PONAX 136.4 6.7 2.5 3.75%

3.Vanguard Total Intl Bd Idx Adm VTABX 124.9 8.8 0.5 none

4.Metropolitan West Total Return Bd M MWTRX 82.9 9.7 1.9 none

5.Vanguard Interm-Term Tax-Ex Inv VWITX 75.9 7. 6 1. 3 n o n e

6.Pimco Total Return A PTTAX 68.2 9.3 1.7 3.75

7.Dodge & Cox Income@ DODIX 65.2 9.8 2.5 none

8.Vanguard Short-Term Inv-Grade Inv VFSTX 63.2 5.8 2.1 none

9.Lord Abbett Short Duration Income ALALDX 57.4 5.1 2.2 2.25

10.DoubleLine Total Return Bond N DLTNX 56.2 6.9 3.1 none

BLOOMBERG BARCLAYS US AGGREGATE BOND INDEX 9.6% 2.0%

B OF A MERRILL LYNCH MUNICIPAL MASTER INDEX 8.8% 1.6%

DIVERSIFIED EMERGING-MARKETS STOCK

FUNDS Ranked by one-year returns

Max.

sales

charge

1.Artisan Developing World Inv ARTYX 29.7% —none1.35%

2.Wasatch Emerging Mkts Sm Cap InvWAEMX 26.6 5.1% 2.00%r 1.95

3.WCM Focused Emerging Mkts Inv WFEMX 25.0 9.0 none 1.50

4.Driehaus Em Mkts Sm Cap Gr@ DRESX 24.3 1.5 2.00r 1.45

5.Wasatch Emerging Mkts Select Inv WAESX 23.3 4.3 2.00r 1.50

6.Morgan Stanley Inst Em Mkts Ldrs A MELAX 22.5 5.6 5.25s 1.55

7.Touchstone Sands Cptl Em Mkts Gr A TSMGX 19.0 —5.001.61

8.Fidelity Emerging Markets FEMKX 17.8 7. 7 n o n e 0 .9 4

9.PGIM Jenn Em Mkts Eq Opps A PDEAX 17.0 5.0 5.50 1.45

10.Wm Blair Em Mkts Sm Cp Gr N** WESNX 16.9 2.3 none 1.55

CATEGORY AVERAGE 6.6% 4.1%

Rank/Name Symbol

Max.

sales

charge

1-year

total

return

Current

yield

Exp.

ratio

As of January 31. @Only share class. Unless otherwise indicated, funds come in multiple share classes; we list the share class that is best suited for individual investors. rMaximum redemption

fee. sFront-end load; redemption fee may apply. †For all share classes combined. **Closed to new investors. MSCI EAFE tracks stocks in developed foreign markets. SOURCES: Bank of America

Merrill Lynch, Morningstar Inc., Vanguard.