MDISX
Franklin Mutual Global Discovery-Z
Global Value Investing Strategy
Franklin Mutual Global Discovery-Z (MDISX) is a mutual fund that seeks capital appreciation by investing primarily in equity securities of companies that are believed to be undervalued. This value-oriented approach is designed to identify stocks that are trading at prices lower than their intrinsic value, based on recognized criteria. The fund predominantly invests in foreign securities, providing investors with exposure to global markets. This strategy is particularly appealing to investors looking for opportunities in international markets where undervaluation may be more prevalent. The fund’s focus on value investing aligns with its category of World Large Value, making it a suitable choice for those seeking to diversify their portfolios with global value stocks.
At A Glance
Executive Summary
MDISX offers global value equity exposure with a 0.96% expense ratio and strong 1-year return of 17.36%, outperforming its benchmark.
Global value equity exposure Strong 1-year return of 17.36% Managed by Franklin Templeton Investments
Higher expense ratio compared to peers Limited exposure to small-cap stocks Potential currency risk from foreign investments
Performance Highlights and Benchmark Comparison
MDISX has demonstrated impressive performance, particularly over the past year, with a 1-year return of 17.36%. This performance slightly surpasses its benchmark, the MSCI ACWI xUS DivAdj Index, which posted a 1-year return of 17.25%. The fund’s ability to outperform its benchmark is a testament to its effective stock selection and value investing strategy. Over the long term, the fund has also shown solid returns, with an inception annualized return of 10.57%. These figures highlight the fund’s potential for capital appreciation and its capability to deliver competitive returns in the world large value category. Investors seeking a fund that can outperform its benchmark while providing global exposure may find MDISX an attractive option.
Sector and Asset Allocation Insights
MDISX’s portfolio is diversified across various sectors, with significant allocations in Health Care (18.78%), Financials (18.61%), and Industrials (14.07%). This sector allocation reflects the fund’s strategy to invest in industries with strong growth potential and undervalued opportunities. Additionally, the fund maintains a balanced asset allocation, with 50.46% in non-U.S. equities and 45.84% in U.S. equities, providing a comprehensive global exposure. The fund also holds a small percentage in bonds (3.15%) and cash (0.56%), which can help mitigate risk and provide liquidity. This diversified approach allows the fund to capitalize on opportunities across different markets and sectors, enhancing its potential for long-term growth.
Risk Metrics and Volatility Analysis
MDISX exhibits a relatively low beta of 0.83, indicating that it is less volatile than the overall market. This lower volatility can be appealing to risk-averse investors who seek stability in their investments. The fund’s standard deviation of 2.99% further supports its low volatility profile. Additionally, the fund’s alpha of 0.09% suggests a slight outperformance relative to its benchmark, after adjusting for risk. The Sharpe ratio of 0.01, while modest, indicates that the fund has generated positive returns per unit of risk. These risk metrics highlight MDISX’s potential to provide steady returns with lower volatility, making it a suitable choice for investors looking for a balanced risk-reward profile.
Top Holdings and Market Cap Distribution
The top holdings of MDISX include Elevance Health Inc (2.29%), AerCap Holdings NV (2.28%), and Medtronic PLC (2.25%), among others. These holdings reflect the fund’s focus on large-cap companies, which comprise 30.48% of the portfolio, and extra-large-cap companies, which make up 33.98%. This emphasis on larger companies aligns with the fund’s value investing strategy, as these companies often have established market positions and stable cash flows. The fund’s market cap distribution also includes medium-cap (29.07%) and small-cap (2.76%) stocks, providing a degree of diversification across different company sizes. This diversified market cap allocation can help the fund capture growth opportunities across various segments of the market.
Comparative Analysis with Similar Funds
When compared to similar funds, MDISX holds its ground with a competitive 1-year return of 17.36%. For instance, BNY Mellon Worldwide Growth-A (PGROX) and abrdn Dynamic Dividend-Inst (ADVDX) have slightly higher 1-year returns of 17.73% and 18.52%, respectively. However, MDISX’s expense ratio of 0.96% is higher than some of its peers, such as PGROX with an expense ratio of 0.0113%. Despite this, MDISX offers a unique value investing approach with a focus on global equities, which may appeal to investors seeking diversification beyond domestic markets. The fund’s performance and strategy make it a compelling option for those looking to invest in a world large value fund.
Expense Ratio and Yield Considerations
MDISX has an expense ratio of 0.96%, which is relatively higher compared to some of its peers. This higher expense ratio may be a consideration for cost-conscious investors. However, the fund compensates for this with a yield of 1.64%, providing a steady income stream for investors. The yield, combined with the fund’s strong performance, can enhance the overall return for investors. While the expense ratio is an important factor to consider, the fund’s ability to deliver competitive returns and income may justify the cost for investors seeking a value-oriented global equity fund. Investors should weigh the expense ratio against the fund’s performance and yield when making investment decisions.
Conclusion: Suitability for Value-Oriented Investors
Franklin Mutual Global Discovery-Z (MDISX) stands out as a compelling option for investors seeking global value equity exposure. With its strong 1-year return of 17.36% and a focus on undervalued stocks, the fund offers potential for capital appreciation. Its diversified sector and asset allocation, along with a relatively low volatility profile, make it suitable for investors looking for a balanced risk-reward investment. While the expense ratio is higher than some peers, the fund’s performance and yield may justify the cost for those prioritizing value investing. MDISX is particularly well-suited for investors seeking to diversify their portfolios with international value stocks and capitalize on global market opportunities.
Similar Securities
DODWX: Dodge & Cox Global Stock-I | Global Value Investment
DODWX offers global equity exposure with a 0.62% expense ratio and strong 1-year return of 21.41%, focusing on value stocks for long-term growth.
BEGRX: Franklin Mutual Beacon-Z | Global Value Investment with Growth and Income
BEGRX offers global value equity exposure with a 0.77% expense ratio, strong 1-year return of 22.29%, and a focus on growth and income.
PRIGX: TRPrice Global Value Equity-I | Global Diversification & Value Focus
PRIGX offers global exposure with a focus on undervalued equities, boasting a 26.89% 1-year return and a competitive 0.69% expense ratio.
MDISX: Franklin Mutual Global Discovery-Z | Global Value Investment
MDISX offers global value equity exposure with a 0.96% expense ratio and strong 1-year return of 17.36%, outperforming its benchmark.
PRAFX: TRPrice Real Assets-Inv | Real Asset Growth Fund
PRAFX offers unique exposure to real assets with a focus on global value, featuring a 0.95% expense ratio and 1.43% yield.
Futher Reading
https://finance.yahoo.com/quote/MDISX/”>Yahoo: Franklin Mutual Global Discovery-Z
https://ftcloud.fasttrack.net/web/chart/MDISX
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