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.
The United Kingdom’s vote to leave the European Union has already led to significant turbulence in global currency and securities markets. Beyond this immediate reaction, we believe that political and economic uncertainty could continue for several years as the UK negotiates its new relationship with the EU.
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.
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.
First Eagle Funds
Shareholder Servicing Agent
PO Box 219324
Kansas City, MO 64121-9324