International Select

International Select

Objective

Realize a total return exceeding the MSCI EAFE Index over a full market cycle.

Investment Strategy

The International Select strategy is a concentrated, high-conviction, high-alpha strategy that is managed by Ralf Scherschmidt and team, the same team that manages our International Opportunities (small-cap) strategy. The International Select strategy will generally own 25–40 positions and invest in companies that have market capitalizations greater than US$5 billion. In managing the International Select strategy, our team follows the same disciplined, time-tested investment process and philosophy that has produced highly superior results over long periods of time in our International Opportunities (small-cap) strategy, with a higher degree of freedom and flexibility in portfolio construction and position sizing. It identifies companies with future fundamentals, earnings power and cash flow generation that are not yet correctly understood by the market. As a result, their securities can be mispriced. Our process repeatably and successfully capitalizes on these situations. Our approach to investing is differentiated and combines empirically-documented sources of alpha (backed by empirical evidence from research in behavioral finance) with rigorous fundamental bottom-up research.

Benefits

  • High conviction, “Best Ideas” portfolio constructed in the spirit of the Kelly Criterion
  • High active share & private equity-like, long-term perspective that allows time arbitrage
  • Focus on high-conviction, very attractive risk/reward, extreme compounders
  • Particular emphasis on companies with leading businesses and strong financials and, therefore, lower fundamental risk
  • Combines empirically-documented behavioral finance principles with fundamental bottom-up research
  • Achieve a more effective asset allocation and greater long-term diversification through investments in non-U.S. equities
  • Invests primarily in developed markets with some exposure to emerging markets
  • Potential for very significant, industry-leading alpha over a full market cycle at a very attractive fee

Lead Portfolio Manager(s)


Fourth Quarter 2023 Commentary
Fourth Quarter 2023
Fact Sheet

Strategy Basics

Inception Date:
Assets in Strategy:
Performance Benchmark:
Portfolio Status:
Minimum Account Size:

9/30/19

$90.2 million (as of 3/31/2024)

MSCI EAFE Index

Strategy open to new investors

$25 million for separate account management


Our Process

Our process rests on our firmwide commitment to uncovering and capitalizing on the persistent and recurring stock pricing inefficiencies in global equities caused by a lag in investor response to new information. This lag in recognizing the catalysts likely to positively impact future earnings growth drives the security selection across all our strategies and mutual funds. The criteria used within each product, however, can differ. This is how our investment team implements our philosophy in the International Select strategy.

*Better-than-expected fundamentals equate to cheaper valuation:

  • If consensus expects $1.00 in earnings for a business with a fair multiple of 15x, then the share price trades at $15. However, if we conclude that the business’s fundamentals are actually stronger-than-expected and it will therefore really earn $1.50, then the real valuation is 10x, a 33% discount to fair value
  • As a result, one buys a business that is both fundamentally stronger and better-than-expected (and therefore should actually trade at a premium) as well as trading at a discount to fair value. In addition, because the business is getting stronger, the fundamental risk is significantly lower
  • The more underappreciated a business’s future earnings power is the cheaper is its valuation

For the Quarter Ended

See pricing for all funds

Performance

Downloadable .xls Composite Returns on the International Select Strategy

Downloadable .pdf GIPS® Compliant Annual Disclosure Presentation for the International Select Strategy

*Inception of the Oberweis International Select Composite is September 30, 2019.

The MSCI EAFE Index is an equity index that captures large and mid-cap representation across 21 developed markets countries around the world, excluding the U.S. and Canada. The index is comprehensive, covering approximately 85% of the free-float-adjusted market capitalization in each country. You cannot invest directly in these indexes.

Net-of-fee composite returns are calculated using the highest model investment advisory fees applicable to portfolios within the composite. Advisory fees are disclosed in Part II of Form ADV. Performance is historical and includes the reinvestment of dividends and other income. Performance is calculated and presented in U.S. dollars. Past performance is not necessarily indicative of future results.

Oberweis Asset Management, Inc. (OAM) claims compliance with the Global Investment Performance Standards (GIPS® standards). To receive a complete list and description of Oberweis’ composites and/or a presentation that adheres to the GIPS® standards, contact Laura Dombro at 800-323-6166; write Oberweis Asset Management, Inc., 3333 Warrenville Road, Suite 500, Lisle, IL 60532; or e-mail laura.dombro@oberweis.net.

For the Quarter Ended

Source: Eikon

Country allocation is defined using MSCI’s Country Classification methodology and represents countries with an allocation in the strategy or index of 2% or more. Country allocations representing less than 2% are categorized in “Other Countries.”

*We own Hong Kong-listed securities, as Hong Kong is part of the benchmark. MSCI classifies these securities as either “Hong Kong” or “China.”

SECTOR ALLOCATION as of

Top 10 Holdings as a % of Total Net Assets. Portfolio Holdings are subject to change at any time. References to specific securities should not be construed as a recommendation to buy or sell and should not be assumed profitable.

Top 10 Holdings as of

Source: Eikon. Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.

Sector Weightings as a % of Total Net Assets

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