The strength of the US dollar was a key factor affecting the performance of the Global Fund in the third quarter and, indeed, over much of the last year. The dollar’s strength reflected the implementation of two unorthodox public policies in the United States: late-cycle fiscal stimulus in the form of a corporate tax cut, and tariffs levied on our largest trading partner, China.
Looking beyond the United States, we confront a very large question in China: Can it sustain its rapid pace of growth? In an effort to rein in the shadow-banking sector, Chinese authorities have slowed money-supply growth. Arguably, China’s banking sector is too big relative to world money supply to simply return to its historical rates of asset growth.
Looking forward, there are, as always, plenty of risks about which to be concerned. Many of the Fund’s stocks have suffered from a view that margins have reached a secular peak and that earnings will fall. The combination of this “as good as it gets” perception with fears about global GDP growth, the impact of trade disputes, rising US interest rates, and a strong dollar has resulted in reduced multiples across the Fund.
In the third quarter of 2018, the fixed income market improved to some extent from investment-grade bonds down through leveraged loans, but duration-sensitive names and sectors generally continued to be punished—damage that may accelerate with further potential increases in Treasury yields.
Matt McLennan reflects on his first decade managing First Eagle's Global Value team, and the challenges and potential rewards of value investing. See what excites him about the next 10 years.
We live in interesting times. Over the past decade, we have witnessed the global financial system on the precipice of collapse, monetary interventions that are unprecedented in modern times, the European community on the brink of disintegration, and populist uprisings that would have been unimaginable as recently as five years ago.
The portfolio managers of the Global Income Builder Fund discuss investing with a focus on downside protection and positioning for late-cycle risks.
Matt McLennan and Kimball Brooker, managers of First Eagle Global Fund (SGENX), recently spoke with Advisor Perspectives to discuss the Fund’s go-anywhere approach.
First Eagle’s Global Value team has adopted the value investment philosophy first developed by Benjamin Graham and later refined by Warren Buffett.
Valuation drives everything, according to Sean Slein and Kimball Brooker, portfolio managers of the First Eagle Global Income Builder Fund. Investing with a perceived “margin of safety” in equities and fixed income, the fund aims to provide both current and future income.
First Eagle High Yield Fund named one of the top bond funds in IBD’s 2018 Best Mutual Fund Awards. Read the full article to learn more.
In this paper, we explain gold’s power as a potential hedge, examine its history, consider the advantages and disadvantages of bullion, gold stocks and ETFs, and explore the differences between hed
On February 2nd the Dow Jones Industrial Average dropped −2.54%—its largest percentage decline since the Brexit referendum in 2016— while the S&P 500 Index dropped −2.11% and the MSCI World Ind
Over the last several years, the retirement landscape has markedly changed. Americans are living longer and need to plan accordingly. At the same time, with defined contribution plans replacing defined benefit plans both at corporations and, more recently, at public entities, individuals also need to shoulder greater responsibility for their own retirement saving.
We believe that First Eagle Funds are a natural fit for defined contribution plans because we believe in the key tenets of successful retirement plan investing. Our funds have distinctive risk/reward characteristics, and they have performed well in some periods when other investments were struggling.
In 2017, two seemingly contradictory trends continued and, indeed, accelerated: the strong advance of global investment markets and the proliferation of geopolitical risks.
The events of 2016 reinforced our long-held belief that complex events cannot be predicted with confidence.
Since Joseph Engelberger, “the father of robotics,” developed the world’s first industrial robots in the 1950s and installed them in a General Motors plant in 1961, the robotics industry has made tremendous advances. Today, there are about 1.9 million industrial robots deployed worldwide across a wide range of applications in fields such as manufacturing, logistics, consumer services, defense and healthcare.
The Global Income Builder Fund has considerable latitude in choosing where and how to invest.
There is growing concern that the rally in US stocks may soon fade.
How can investors protect their equity portfolios against a market crisis?
Kimball Brooker Jr. and Sean Slein discuss First Eagle Investment Management and the Global Income Builder Fund.
First Eagle's Thomas Kertsos believes that gold has unique risk-reward characteristics to be able to potentially preserve value in real terms in the long-term and provide diversification and resili
Eight years into a bull market, many commentators believe a bear market is coming, but no one is certain exactly when. In the interim, some have noted signs of change in the environment for active and passive managers.
Co-Portfolio Manager Ed Meigs discusses the Global Income Builder strategy, the importance of flexibility in the search for income and the team's unwavering focus on seeking downside protection.
While the gold price has been volatile over the last year, it has remained above the lows reached in 2015. In this brief commentary, Portfolio Manager Thomas Kertsos and Research Analyst Max Belmont offer their insights into current trends.
To mark the Fund's 30-year anniversary on April 10th, Harold Levy recalls the creation of the the Fund of America strategy, reflects on what's changed over 30 years and reaffirms his commitment to providing prudent stewardship of shareholders' assets.
We think the alternative to benchmark-oriented investing is active value management that's oriented to absolute - not relative - returns.
Passive investments will play a role in some portfolios, but investors should also have the flexibility to take advantage of markets as they evolve and have the ability to protect their capital from permanent impairments through the use of managers who are both patient and discriminating.
Investor capital continues to pour out of active vehicles and into passive ones. Investors evidently believe that passive funds are attractive because their fees have been low and their returns have been good. In our view, this is an overly simplistic way to think about today’s market environment. Whether in equities or in fixed income, passive strategies attempt to replicate the broader returns of the markets. If the broader markets themselves are priced for low returns, investors who choose passive vehicles face the prospect of singularly disappointing returns over the long term.
Investors in the First Eagle Global Fund have generally stayed invested substantially longer than the average mutual fund investor. We think downside protection is one of the reasons.
Income is a here-and-now need, but it also has a future dimension. Investors want to be sure of meeting their current financial obligations, and they want to be just as confident about funding future ones, as well. That is why the First Eagle Global Income Builder Fund seeks to generate current income while also providing long-term growth of capital. Our approach is based on three distinctive features: asset-class flexibility, global range and a focus on downside protection.
In a recent video interview our Gold Fund Portfolio Manager Matt McLennan and Associate Portfolio Manager Thomas Kertsos took a deeper look into the gold and gold mining equities. They addressed the role of gold within a portfolio, cash versus gold, long-term history of gold and the role of gold-mining equities.
Rising volatility spurs many investors to sell indiscriminately and, in particular, to flee stocks they see as underperformers. This fear-driven flight may send share prices down into bargain territory, where value investors can acquire them.
For more than 25 years, First Eagle Fund of America has delivered higher total returns with lower volatility than most of the relevant benchmarks and Morningstar categories.
Active share measures the percentage of a fund’s portfolio holdings differing from its benchmark. Active share can range from 0% (index fund) to 100% (no commonality with the benchmark index).The greater that percentage, the stronger the indication that the fund employs true active management over time. A 2009 Yale School Of Management study on active management found that funds with higher active share generally outperformed against their benchmarks over time on a historical basis.
During periods of significant market disruptions or in the event that suitable investment opportunities become less available, the Fund has the flexibility to hold higher cash positions as evidenced in the past.
We look to gold to provide protection against the unintended consequences of government interventions, bank bailouts, long-term imbalances and currency crises.
Managers who are given the flexibility to go anywhere and own out-of-benchmark stocks and who make independent investment decisions, in our view, are more likely to outperform over the long term.
John Arnhold, First Eagle Investment Management’s chairman and CIO, is a scion of the family that started the firm in Dresden, Germany, in 1864.