IA Clarington Global Opportunities Fund

Analysis: Veteran manager Brad Radin took over the management duties of this concentrated, all-cap global equity fund back in late 2011. It struggled in 2012, trailing its peer group, but started to turn things around in 2013 with a respectable 37.5% gain. In the past two years, the fund has gained an annualized 17.6%, which has lagged the MSCI World Small Cap Index.

To be fair, I don’t believe that two years is a long enough period on which to judge Mr. Radin’s track record. His value focused investment process takes a much longer outlook, typically three to five years. Ideally, he is looking to buy well managed, cash flow generating companies at the point of maximum pessimism. If you look at his longer term numbers with his old fund, the Templeton Global Smaller Companies Fund, you will see that he was able to consistently generate strong returns, with below average volatility. With no changes to his investment process, I see no reason why he won’t be able to deliver that over the course of a typical market cycle.

The manager is following a few key themes. He is actively taking profits in those companies where he believes the market price now fully reflects its value. He has identified a few names in Europe that he has or will soon be trimming. He is also underweight in the U.S. and he expects to remain so in the near term. Currently, most of his U.S. exposure is in financials, which have been very strong contributors to performance in the past year. Despite the dire headlines coming out of China, he is finding a few very compelling investment opportunities. This exemplifies his buy at the point of maximum pessimism discipline.

Given Mr. Radin’s track record, I am cautiously optimistic regarding this fund. I cannot give it a full recommendation yet, but will be continuing to monitor it closely.