IVY FOREIGN EQUITY FUND $26.03 (CWA Rating: Conservative) outperformed the Morgan Stanley benchmark international index over the last 10 years. The fund gained 8.0%, and that was better than the Morgan Stanley benchmark’s gain of 5.7%. Ivy Foreign Equity Fund made 5.1% over the last year. The fund invests in companies based outside of Canada, but cuts risk by avoiding direct investment in emerging markets.
Ivy Foreign Equity is one of our top foreign fund recommendations. Still, we think non-U.S. international funds should make up at most perhaps 10% of the holdings of a conservative investor.
The fund’s top 10 holdings are Reckitt Benckister plc (UK household & healthcare products), Brown & Brown (U.S. insurance), Danaher Corp. (U.S. control products and tools), Essilor International SA (corrective eyewear), Henry Schein Inc., (U.S. healthcare), PepsiCo (U.S. food & beverage), William Demant (hearing health products), Omnicom (U.S. media services), Diageo plc (UK alcoholic drinks) and Ecolab Inc. (U.S. maintenance & cleaning products).
The fund holds 46.6% of its assets in the U.S., 15.4% in the UK, 13.3% in France, 5.8% in Denmark, 1.5% in Ireland and 1.8% in Japan.
This $2.5 billion fund holds 15% of its assets in cash. Ordinarily, we don’t like the market-timing aspect of holding that much cash. But the fund should be able to use the cash over the next few months to pick up some stocks at bargain prices.
Ivy Foreign Equity Fund is a buy for above average long-term returns.