Thornburg's Global Opportunities Fund favors technology companies for their strong balance sheets and is bullish on diversified financials, but is keeping away from traditional media companies that have lost their sheen post the downturn.
The fund, with total assets of $293 million as of Sept. 30, looks for promising companies at discounted valuations, but is not averse to big names like Google Inc and Microsoft Corp.
"Google is much more of a growth story in the longer term ... Microsoft is trading at about 9 times earnings and about a 3 percent dividend which is pretty attractive for such a dominant business," said Vinson Walden, the fund's co-portfolio manager.
Thomson Reuters' Lipper service assigns the fund a five rating, the maximum possible, for total return and a three rating for consistent return.
The fund, that has invested 18 percent of its portfolio in technology and telecom companies, has Cable & Wireless Worldwide and Australian telecom major Telstra Corp among its top holdings.
Though it distances itself from traditional media companies, the fund likes Television Broadcasts Ltd (TVB), Hong Kong's biggest TV operator. It has about 3 percent of its portfolio invested in TVB.
"In the traditional media industry, the fundamentals are okay, but the balance sheets in general have gotten weaker," said Walden.
"On the other hand, TVB has no debt at all and its balance sheet is as good as ever."
Among diversified financials, the fund's top picks are KKR Financial Holdings and Willis Group Holdings.
"KKR Financial Holdings has a very strong dividend, nearly 10 percent, and also has the ability to raise it. Willis operates in insurance, which is generally a growth area, driven by emerging markets and globalization," said Walden.
Thornburg finds some industrials and manufacturing companies attractive due to their current depressed valuations.
"We are interested in global companies that can participate in (growth) prospects in Brazil, India, or wherever they maybe," Walden said.
As of end-September, Brazil accounts for more than 7 percent of the fund's portfolio. It has invested in Brazil Foods to take advantage of the surging demand for processed and convenience foods in the country.
Cyrela Brazil Realty, which builds apartments and condominiums, is another important investment.
"Both these companies are leaders in their space, they have strong managements, strong balance sheets and good prospects in the long term. They will both grow revenue at a double digit rate this year," Walden said.
And though the fund avoids some Asia-based technology and Internet-related businesses for their expensive valuations, Walden said he is following companies like search engine giant Baidu Inc.
"We are keeping track of the Chinese domestic economy and some of the consumer-oriented ones like Baidu," Walden said.
Thornburg Global Opportunities Fund is down 3 percent in the last year, while the benchmark MSCI AC World Index -- a free-float index that measures equity performance in Asia, excluding Japan -- has lost 6 percent.
Kabel Deutschland Holding AG, Swiss Re and Transocean Ltd are among the fund's top-10 holdings.
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