Performance evaluation of the Vanguard International Growth Fund
The Vanguard International Growth Fund Investor Shares (VWIGX) has figured among the top three funds under review across all periods. While year-to-date, it stands third among the 12 funds chosen for this review, it’s second for the one-year period. We’ve graphed its performance against the iShares MSCI ACWI ex U.S. ETF (ACWX) and the iShares MSCI EAFE ETF (EFA).
Let’s look at what’s contributed to the fund’s superlative performance so far year-to-date.
Contributions to returns
Technology sector stocks have helped VWIGX to post a top-three performance in 2016. Tencent Holdings (TCEHY) has been the sector’s star performer, leading other positive contributors such as ARM Holdings (ARMH), Alibaba Group (BABA), and Mercadolibre (MELI). Meanwhile, Baidu (BIDU) has emerged as a major detractor.
The industrials sector, which has trailed technology stocks, has been powered by Rolls Royce Holdings (RYCEY) and has had help from Atlas Copco. Meanwhile, consumer staples have been helped by Raia Drogasil, Nestlé (NSRGY), and L’Oréal (LRLCY).
The consumer discretionary sector has also posted gains on the back of positive contributions from Amazon (AMZN), Adidas (ADDYY), and New Oriental Education & Technology Group (EDU), among others. However, its rise has been checked by sizable negative contributions from Fiat Chrysler Automobiles (FCAU), JD.com (JD), and Tesla Motors (TSLA).
Financials is the only sector to have contributed negatively to VWGIX. Banco Popular Espanol has bled the sector the most, with UniCredit (UNCFF), Deutsche Bank (DB), and HSBC Holdings (HSBC) also driving down returns.
VWIGX has shown itself to be a strong and consistent performer across periods. The fact that financials is the only sector that has contributed negatively to the fund so far in 2016 speaks volumes about the stock-picking ability of the fund’s manager.
The fund’s assets are spread across a range of companies and geographies, and it could be a core holding as far as international funds go.
In the last article of the series, we’ll look at the overall picture that emerges from this analysis.