"In the 1980s, foreign markets outperformed the U.S. In the 1990s, the U.S. was the big story. Ten years from now, I believe we will look back and be pleasantly surprised by what stocks of European companies have done. I think we're getting near an inflection point where a divergence between the U.S. and other markets will happen again." Reflecting that view, the fund has about 70% of its assets in Europe, a 10% increase over last year's allocation to the region.

Much of the increase has come from selling off Japanese holdings and investing those assets in European stocks. Those moves have brought the fund's Japanese allocation to a modest 8% of assets, compared with 15% a year ago. Yockey cites the stubborn refusal of Japanese managers to pay attention to shareholder value, as well as overall economic weakness, as the major reasons for the change.

He isn't particularly bullish about the rest of Asia, either. "You see a lot of component and widget makers in Asia that don't stand out. On the other hand, Europe has a number of companies, including many banks and financial institutions, that dominate their markets."

Those financial-services and insurance companies, located mainly in Europe, account for 30% of fund assets. Over the last nine months, Yockey has been scooping up stocks like Rolobanca and Unicredito, both Italian banks, as well as Switzerland's UBS, the largest money-management firm in the world. He believes that investors have overlooked Europe's financial sector, making valuations in the group particularly attractive.

Consumer discretionary goods, which account for 28% of Artisan's assets, also play a prominent role in the portfolio. Holdings here include Walmex, the Mexican retailer half-owned by Wal-Mart, and French cigarette-maker Altadis.

Yockey is a growth-at-a-reasonable price investor who likes to buy stocks when their price-earnings ratios are no more than one to two times the rate of earnings growth. So if a company is growing earnings at a rate of 15% a year, the stock's price will not exceed 30 times earnings when he buys it. He also wants to see a sustainable, recognized franchise.

Over the years, one of Yockey's trademarks has been his willingness to invest in both multinational giants and smaller up-and-comers. But with assets of $4.5 billion, some observers wonder if perhaps Artisan International has gotten a bit too big to troll in small-company waters.

Yockey insists he still owns a lot of names not found in other portfolios. And he bristles at the notion that the fund's size has become a drawback. "When we first started out, some people complained that we were too small and didn't have enough resources for international investing," he says. "Now, they claim we're too big. It seems no matter what size we are, someone says we're too something."

While it's true that its manager invests in smaller companies, a weighted-average market capitalization of $23.9 billion makes it clear that the fund is far from a small- or mid-cap play. Still, what probably will matter more to investors in the long run with this fund, as well as others in the international group, is the ability to overcome the obstacles that foreign markets keep throwing at them.

Tweedy, Browne Global Value Fund

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