Nuveen International Growth Fund’s performance
In this article, we’ll outline the performance of the Nuveen International Growth Fund – Class A (NBQAX), which is one of the classes available for retail investors. The fund invests in stocks of companies like Novo Nordisk (NVO), Teva Pharmaceutical Industries Limited (TEVA), Ctrip.com International (CTRP), Domino’s Pizza (DPZ), and Intercontinental Hotels Group (IHG), among others.
From a purely NAV (net asset value) return standpoint, the NBQAX was the best performer for both the one-year period until February 29, 2016, and for 2015 among the peers chosen for this series. For return comparison, we have chosen two ETFs: the iShares MSCI ACWI ex U.S. ETF (ACWX) and the Vanguard FTSE All-World ex-US ETF (VEU). For evaluating benchmark-related metrics, we’ve chosen ACWX as the benchmark for all funds in this review, as it tracks the MSCI All Country World ex-U.S. Index.
The NBQAX’s standard deviation, or the volatility of returns, in the one-year period until February 29 was 16.2%. This is higher than both the ACWX’s 15.4% and the peer group’s average of 15.7%.
The fund’s risk-adjusted returns, calculated via the Sharpe Ratio, were negative for the one-year period ended February 29. Evaluating a negative Sharpe Ratio may be misleading, so we’ll avoid that. The ratio stood at 0.92 for 2015, making it the best fund among its peers.
The information ratio, calculated with ACWX as the benchmark, was 2.17 for the one-year period ended February 29, placing it first among its peers. The information ratio shows the consistency of fund managers and their ability to generate excess returns over a benchmark. The higher the reading, the better the consistency. For 2015, the fund’s information ratio was second among its peers.
A note to investors
The NBQAX was the only fund among the 12 to post a double-digit alpha, making it the stand-out best performer for the one-year period until February 29, 2016. For 2015 as well, the fund’s alpha was the highest among its peers. YTD 2016 has been less than pleasant for the fund, and its high standard deviation is a bit of a worry, but other short-term metrics are clearly in favor of NBQAX and show that it has been compensating investors for the risk it is taking.