The Stock Market’s Perplexing Rise Lifted Many Kinds of Funds
Diverse investing styles yielded winners, with funds investing in Latin American, clean energy and value stocks all toting up big gains.
By Tim Gray
Ahead of the Market
How three of the better performers of the fourth quarter of 2020 fared against the stock market — and against their peer groups of funds.
T. Rowe Price Latin America
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
T. Rowe Price Latin America
+33.7%
Latin America stock
+32.6%
Third Avenue Value
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
Third Avenue Value
+35.8%
World stock
+15%
Calvert Global Energy Solutions
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
Calvert Global Energy Solutions
+32.4%
World small/mid stock
+22.4%
T. Rowe Price Latin America
Third Avenue Value
Calvert Global Energy Solutions
+
40
%
+
40
%
+
40
%
+
30
+
30
+
30
+
20
+
20
+
20
+
+
+
10
10
10
S. & P. 500
TOTAL RET.
S. & P. 500
TOTAL RET.
S. & P. 500
TOTAL RET.
0
0
0
O
N
D
O
N
D
O
N
D
FOURTH-QUARTER RETURNS
T. Rowe Price Latin America
Third Avenue Value
Calvert Global Energy Solutions
+33.7%
+35.8%
+32.4%
Latin America stock
World stock
World small/mid stock
+32.6%
+15%
+22.4%
T. Rowe Price Latin America
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
T. Rowe Price Latin America
+33.7%
Latin America stock
+32.6%
Third Avenue Value
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
Third Avenue Value
+35.8%
World stock
+15%
Calvert Global Energy Solutions
+
40
%
+
30
+
20
+
10
S. & P. 500
TOTAL RET.
0
O
N
D
FOURTH-QUARTER RETURNS
Calvert Global Energy Solutions
+32.4%
World small/mid stock
+22.4%
By The New York Times | Source: Morningstar Direct
For much of the last decade, investors have prized big U.S. growth companies, like Amazon and Apple, above other sorts of stock-market sectors.
In the fourth quarter, despite the Covid-19 pandemic, the market rewarded a greater variety of stocks. In a hard-to-figure surge — the S&P 500’s total return was 11.07 percent — all sorts of investment approaches gave hefty returns.
Consider the diversity of three of quarter’s top-performing mutual funds. One invested in Latin America; another in companies at the forefront of the transition to renewable energy; and the third in so-called value stocks, that is, those priced cheaply based on estimates of their underlying worth.
T. Rowe Price Latin America
Tech stocks aren’t absent from the T. Rowe Price Latin America fund, managed by Verena Wachnitz. It’s just that the ones Ms. Wachnitz buys aren’t household names in the United States. Instead of investing in Amazon, Ms. Wachnitz has bet on e-commerce by buying MercadoLibre, an Argentine company that operates throughout Latin America, and Magazine Luiza, a Brazilian outfit.
“The pandemic has been a blessing for this kind of business,” she said. “It has really accelerated the adoption of e-commerce.”
MercadoLibre now has the second-largest market capitalization, behind the mining company Vale in Brazil, among stocks listed in Latin America, she said.
The name of Ms. Wachnitz’s fund makes plain her mission: buying shares of companies based in Latin America. She prospects heavily in Brazil and Mexico, because those countries’ markets loom large in the region. Brazilian stocks account for about 64 percent of the assets of her fund, and Mexican ones 15 percent.
Ms. Wachnitz said she’s optimistic about the economic prospects of Brazil, and less so about Mexico’s.
Brazil’s president, Jair Bolsonaro, has been a lightning rod for international criticism. With his penchant for outrageous tweets, he’s the self-styled “Trump of the tropics,” and his administration has been investigated for possible corruption. But he has pursued pro-market policies, she said.
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