International Value

Seeks to achieve attractive real returns over time while avoiding the permanent impairment of capital.

122 - Performance - Institutional GV Strategy

*Inception date includes the time period prior to January 1, 2000 when the strategy was managed by the strategy's senior adviser while he served as the portfolio manager at a firm different from First Eagle Investment Management.

123 - Investment Restrictions and Guildelines

The above are not investment guidelines or restrictions and are subject to change.

129 - Not an offer - Institutional

The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Disclosure_International Value Annual Returns

* Performance for 1993 is from 8/31/93 to 12/31/93

118- Past Performance Not a Guarantee Disclosure

Past performance does not guarantee future results.

129 - Not an offer - Institutional

The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

The above are not investment guidelines or restrictions and are subject to change.

The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Philosophy

The team believes there is a persistent market failure to recognize companies' intrinsic value. The team attempts to exploit this market failure through a bottom-up, fundamental, benchmark-agnostic investment approach.

Investment Process

The team uses a value approach to investing in international equity markets—a process that has remained constant since the formation of the Global Value team. They seek to identify opportunities in companies that have temporarily disappointed investors; industries in turmoil or out of favor; and countries in economic downturns or overlooked by the market.

The team focuses on companies with primarily quality businesses that they believe have above-average sustainable profitability, that are trading at what they believe are significant discounts to their intrinsic values.

  • 1

    Analyze, Understand Business Models

    Thoroughly understand a company and the market in which it operates. The team's document-driven analysis examines:

    • A company's market share
    • The nature of its products and its business contingencies
    • Other critical factors.
  • 2

    Recast Financial Statements

    Financial statements are recast because:

    • Conservative accounting practices can mask the true earnings power of a company
    • Likewise, accounting practices are sometimes too liberal

    Goal: To uncover a company's true economic earnings using only demonstrated results.

  • 3

    Calculate Intrinsic Value

    The team places great emphasis on:

    • Balance sheet valuation (such as Enterprise Value to Asset Replacement Value)
    • Cash flow valuation (such as EV/EBIT)

    Investments are made based on significant discounts to what is believed to be a company's intrinsic value.

  • 4

    Typically Invest for Long Term

    The team typically seeks what they feel is a significant discount to what they believe is a company's intrinsic value

    • They seek further protection by determining a margin of safety in each holding
    • Viewed as a form of protection against uncertainty in a fundamentally unknowable future.

 
The International Value strategy may also invest in non-equity securities in an attempt to help preserve the purchasing power of our clients' assets. These include:

  • Gold (bullion, mining companies)
  • Corporate bonds (senior or subordinated bonds, convertible bonds)
  • Cash and cash equivalents (commercial paper).

 

Competitive Advantages

  • A primary objective is to seek to achieve positive real returns over time
  • Insistence on what we consider to be a margin of safety
  • Flexibility to invest without regard to a benchmark

There are risks associated with investing in securities of foreign countries, such as erratic market conditions, economic and political instability and fluctuations in currency exchange rates. These risks may be more pronounced with respect to investments in emerging markets.

Investment in gold and gold related investments present certain risks, and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.

The principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value.

All investments involve the risk of loss of principal.

Disclosure_International Value Annual Returns

* Performance for 1993 is from 8/31/93 to 12/31/93

118- Past Performance Not a Guarantee Disclosure

Past performance does not guarantee future results.

129 - Not an offer - Institutional

The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

66-Disclosure Special Risks Foreign special risks GLO, OVS, GLD, GIB, HY

There are risks associated with investing in securities of foreign countries, such as erratic market conditions, economic and political instability and fluctuations in currency exchange rates. These risks may be more pronounced with respect to investments in emerging markets.

68-Disclosure Special Risks Gold special risks (short version) GLO, OVS, USV, GIB, FEA

Investment in gold and gold related investments present certain risks, and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.

73-Disclosure Special Risks Value investing special risks GLO, OVS, USV, GLD, FEA, GIB

The principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value.

74-Disclosure Special Risks Risk of loss All funds

All investments involve the risk of loss of principal.

IV_Disclosure

N.A. – Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.

International Value Composite contains fully discretionary accounts invested in a range of asset classes from markets outside the United States. To achieve its objective, management will normally invest in common stocks (and securities convertible into common stocks) of foreign companies. Prior to 14-Sep-2009, the composite was named Diversified International. For comparison purposes, the composite is measured against the MSCI EAFE (Net) Index. Returns include the effect of foreign currency exchange rates. The exchange rate source of the composite is Bloomberg 4 pm EST. The exchange rate source of the benchmark is Reuters 4 pm GMT. The asset mix of the accounts in the composite may not be comparable to the MSCI EAFE (Net) Index. Indices do not incur management fees or other operating expenses. Investments cannot be made directly into an index.

Prior to 07-Dec-2009, First Eagle Investment Management, LLC was known as Arnhold and S. Bleichroeder Advisers, LLC.

First Eagle Investment Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. First Eagle Investment Management, LLC has been independently verified for the periods 01-Jan-1996 through 30-Jun-2018.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The International Value Composite has been examined for the periods 01-Jan-2000 through 30-Jun-2018. The verification and performance examination reports are available upon request.

First Eagle Investment Management, LLC is an independent SEC registered investment adviser. The firm maintains a complete list and description of composites, which is available upon request.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Total returns of the composite and benchmark are presented net of estimated foreign withholding taxes on dividends, interest, and capital gains. Withholding taxes may vary according to the investor’s domicile. MSCI uses withholding tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rate.

Past performance is not indicative of future results.

Derivatives may make up a material part of the composite strategy. The composite may invest in structured notes, the value of which is linked to the price of gold or silver to hedge against market conditions. The use of structured notes is subject to availability and market conditions. The composite frequently uses currency forwards to hedge currency exposure. Structured notes are purchased through large commercial banks with strong credit rankings.

The annual composite dispersion presented is an equal-weighted standard deviation calculated for the accounts in the composite for the entire year.

The US Dollar is the currency used to express performance. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fees performance was calculated using the highest applicable management fee of 0.75% applied monthly. Actual returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. The investment management fee schedule is 0.75% on assets. Actual investment advisory fees incurred by clients may vary.

The collection of fees produces a compounding effect on the total rate of return net of management fees. As an example, the effect of investment management fees on the total value of a client’s portfolio assuming (a) quarterly fee assessment, (b) $1,000,000 investment, (c) portfolio return of 8% a year, and (d) 1.00% annual investment advisory fee would be $10,416 in the first year, and cumulative effects of $59,816 over five years and $143,430 over ten years. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

The International Value Composite was created 01-Jan-2002. Performance presented prior to 01-Jan-2000, is for a US mutual fund that was managed by Jean-Marie Eveillard while he was affiliated with another firm and had portfolio management responsibility. First Eagle Investment Management, LLC, acquired this prior firm and became investment adviser to the US mutual fund on 31-Dec-1999. On 27-Mar-2009, Mr. Eveillard transitioned from having portfolio management responsibilities to a senior advisory role to First Eagle Investment Management, LLC, a position he also held from 01-Jan-2005 to 23-Mar-2007.

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Contact Us

Head of Institutional

Doug Meyer, CFA
doug.meyer@feim.com
212.698.3013

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