Neil Martin has a fine interview with Jeff Everett, Chief Investment Officer for Templeton, in this week's Barron's. I think a fair amount of Templeton managers have left since Sir John sold the firm to Franklin Resources in the early 1990s. But Everett is among those who've stayed, and I've been told he's a great guy.
According to the Barron's article, his funds are performing well. Everett manages the $9.2-billion Templeton Word Fund (which invests globally) and the $18-billion Templeton Foreign Fund (which invests in non-US markets). The piece doesn't say it but funds that size mean he pretty much has to stick with large and mega cap companies.
That's not a put-down, just an observation. And, besides, I'd love to have that "problem." ;-)
A couple of thing Everett's interview reminds me of. One, that the Templeton folks have largely eschewed hedging currencies. Their reasoning is that as long term investors currency fluctuations will even out over time. That's true from my reading of the subject. And besides, hedging currencies isn't economical for me personally.
The second thing the Barron's article reminds me of is the Templeton approach to global investing itself. They do things bottom up -- by having their analysts cover industries, not countries. They perform secondary coverage on countries.
That approach makes sense to me, like it surely does to most value investors. I can't imagine saying to myself, or anyone, that a portfolio should have a set percentage in this region or that country. I just try to find bargains, and I have a few holdings in Japan, two in the UK, a couple in Canada. You get the idea.
I also see in the interview that Everett has been a sizable investor in media-related companies, which sounds familiar to regular readers of Controlled Greed.com. He says the three biggest holdings in his funds are News Corp., DirecTV and Comcast. You know I own those last two. Here's what he says about the sector:
About 18 months ago, there was a lot of uncertainty about the future of the business in the light of changing viewer habits, alternative distribution channels underscored by iTunes and new content, all of which represented an opportunity for us. We felt very comfortable with the cash flows, managements and long-term opportunities and valuations of those three companies. So we made significant investments in those three and it worked out.
A couple of readers told me last year that I should have bought News Corp. I stated then that I could be making a mistake by not buying it, and maybe I did.
Lastly, Everett talked up several telecom stocks. I was a bit surprised he didn't mention BCE Inc. (BCE/NYSE). I don't know why, except that I own it. ;-)
Well, a quick check of WSJ.com reveals that Templeton Investment Counsel ranks as the fourth largest institutional investor in BCE and that Templeton Foreign Fund is the largest mutual fund investing in the company. Both show selling some shares as of 9/30/06.
Good interview. This is the stuff Barron's excels at -- interviewing money managers and letting them explain their stock picks.