Looking for Overseas Exposure

By Josh Lipton Lei Wang has a unique perspective when it comes to investing in China: not only was the investment pro born, raised, and educated there, but he also used to work as an analyst at China's central bank. “I don't want to overstate it but, from my experience working for the central bank, I do understand the mindsets of these Chinese policymakers,” Lee says. “I understand how the financial sector works over there.”

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Today, as co-manager of Thornburg International Value (TGVAX), the 39-year-old Wang puts his expertise to work as he scours China and the rest of the world looking for smart places to commit his clients' capital. He'll hunt anywhere in Europe, Latin American and Asia where he can find the best investment opportunities. Through December 8, the fund's 10-year annualized return of 7.99% bests the MSCI EAFE (Europe, Australasia, Far East) Index by 4.69 percentage points and leads its Morningstar rivals by 4.99% percentage points, landing in the top 4% of its category.

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Morningstar awards the fund five stars, its highest rating. Wang manages the fund along with William Fries, who was Morningstar's International-Stock Fund Manager of the Year in 2003, and Wendy Trevisani. Thornburg International Value, which carries a front-end load of 4.5%, requires a minimum $5,000 investment. Minyanville checked in with Wang recently at his office in Santa Fe, New Mexico to discuss the fund's strategy and some top stock picks. Minyanville: The Thornburg team employs an interesting three-pronged approach to its stock selection. Can you walk us through these three diversified baskets?

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Lei Wang: The fund makes equity investments in three types of companies. First, there is what we call the basic value stocks. These are stocks of financially sound companies with well-established businesses whose stock is selling at low valuations relative to the companies' net assets or potential earning power. An example of such a basic value stock that we own would be ArcelorMittal (MT), which is the world's largest steel producer, with operations in Europe, North and South America, Africa, and Asia. Minyanville: How about the second basket? Wang: The second basket is what we call the consistent earners. These are growing companies with steady earnings and dividend growth. Examples would include Teva Pharmaceutical Industries (TEVA), which is the world's largest generic pharmaceutical manufacturer. Another one would be SAP AG (SAP). Its software is used by companies to manage business functions like accounting and human resources.

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