http://tinyurl.com/kr6hc

To be fair, fundscope only has data going back 5 years, so please do your own DD. Good luck.

At least use “chasing performance” in the right context. It generally applies to people buying based on previous short-term performances, not 15-years.

Beside, I brought up volatility a number of times. Although we can’t say the same about returns, funds that had been volatile in the past will generally continue to be volatile in the future. Both Templeton already under performed Cundill and Saxon by about 2+% over 15 years (think compounding), but did it with higher volatility, so the risk-adjusted return is even lower. That’s what I meant by terrible.

Looking at their graphs, Templeton also has high correlation with the TSX compares to Cundill or Saxon. This further increase risks to your own personal portfolio if you follow the Modern Portfolio Theory. Also judging from the 5 year return, it looks like more or less a closet index, so why pay 3% MER just to hold a fund that acts like the indexes? (Another reason why you shouldn’t ignore MER.) Don’t forget, Templeton corrected by around -35% between 2000-2002. If this is truely a value fund, then it’s doing a terrible job, because most value funds outperform during bear markets. The 2 funds I mentioned return about 20% and 40% respectively in that same bear market.

To my knowledge, there’s no international index like the MSCI US Prime Market Value which most US Large Cap Value index funds track. So, most of the international funds get compared to EAFE, which is usually a bad comparison for a value fund.

You also have to consider that it has an expense ratio of 1.63, which is about a point higher than some equivalent funds (i.e., Dodge & Cox).

I can’t agree with that. The fund has a very respectable long-term record.

You can pull out all the figures you want on mutual funds that have done better or worse than the Templeton fund, or any fund for that matter. In the end it doesn’t say anything about what any given fund will do in the future. Chasing performance is a bit dangerous if you ask me.

Here’s a quote from a fundlibrary.com report:
“Templeton International Stock Fund is one of the longest running and best performing international equity funds over the long term. The fund invests in equity securities outside of North America, run by veteran Templeton manager and President of Franklin Templeton, Don Reed. Over the past ten years, this fund had the strongest return given the amount of risk assumed relative to all other international equity funds. The fund is managed with a value investment style that places individual stock selection first and foremost, and strong emphasis is placed on buying and holding strong companies over the long run.”

Sounds like their risk-adjusted return is pretty good according to them. I’m not sure why you think 9.5% is “terrible” by the way.

Cundill Value had a 15 year compounded return of 11+%, while Templeton International Stock had only managed 9.5% and with higher volatility, so the risk adjusted return is terrible.

Another one on my list is Saxon World Growth which has much lower volatility and still managed to beat Templeton over 15 years with 12.19%. Plus its MER is 1% less!!!

In “A Random Walk”, Malkeil talks briefly about currency-hedged international funds. If I recall correctly, he basically says that the costs incurred by the hedging generally negate any theoretical benefits the hedge would provide.

A high MER means nothing to me on its own. Why do you care so much about its high MER?

Also what’s the reasoning of picking Templeton International Stock over other international funds? It has very high MER, low returns and high volatility. Just curious.