High US Stocks Exposure Hasn’t Helped the Ivy Global Growth Fund



Performance evaluation of the Ivy Global Growth Fund

It has not been a good year for the Ivy Global Growth Fund – Class A (IVINX) so far, though it has seen some improvement from the previous review period. In both the YTD 2016 period until August 19 as well as the one-year period, the fund stands ninth among the 12 funds chosen for this review. We have graphed its performance against two ETFs: the iShares MSCI ACWI ex U.S. ETF (ACWX) and the iShares MSCI EAFE ETF (EFA).

Let’s look at what has contributed to this poor performance by the fund in YTD 2016.

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Contribution to returns

Consumer discretionary stocks have caused the most damage to the IVINX in YTD 2016 until August 19. Carnival (CCL) and China’s JD.com (JD) have been chief decliners from the sector. TripAdvisor (TRIP) and L Brands (LB) have also contributed sizably. There has been some support from Amazon (AMZN) though.

Health care is another major negative contributor. Leading detractors from the sector are Teva Pharmaceutical Industries Limited (TEVA), Gilead Sciences (GILD), and Acadia Healthcare Company (ACHC). Medtronic (MDT) and HCA Holdings (HCA) have offset some of the losses from the sector.

Even though financials form less than 1% of the portfolio, the sector is the third largest negative contributor in 2016. Intesa Sanpaolo (IITSF), Prudential (PUK), and Signature Bank (SBNY) are the main decliners from the sector.

Tech stocks have been instrumental in reducing the drag created by negatively contributing sectors. Tencent Holdings (TCEHY) has had support from Alibaba Group Holding (BABA). Meanwhile, Halliburton (HAL) has powered the energy sector. Industrials have been helped by JB Hunt Transport Services (JBHT), Kansas City Southern (KSU), and Canadian Pacific Railway Limited (CP).

Investor takeaways

The IVINX is different from most other funds in this review due to its high exposure to US stocks. It’s suitable for those investors who want global equities exposure with a focus on US stocks. Investors who already have enough exposure to US stocks may need to look at other funds from the category.

The fund has not done well in 2016 so far despite its sizable exposure to US stocks. This brings into question the stock-picking ability of the fund manager. Investors may need to look at other funds to get exposure to global stocks.

Let’s now move on to the MFS International Growth Fund – Class A (MGRAX).


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