Q. Should I keep my shares of Artisan International Fund?
A. It’s definitely not a run-of-the-mill foreign fund.
Highly respected portfolio manager Mark Yockey has run it since its inception 11 years ago. Because he detects potential growth in many more places than most of his competitors, the holdings are diversified across many sectors and regions.
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While value funds have generally outpaced growth funds such as Yockey’s in recent years, the patient manager’s results have been solid. That success has attracted considerable money to not only this fund, but to institutional and separate accounts that he also runs.
The $11 billion Artisan International is up 18 percent over the past 12 months and has a three-year annualized return of 18 percent. Both results rank at or near the top one-fourth of foreign large-growth funds.
“Artisan International gets our highest recommendation as a good core choice to build your foreign portfolio around,” said Dan Lefkovitz, analyst with Morningstar Inc. in Chicago.
“However, because of its large asset size, you probably shouldn’t expect relative returns to look as good as in the past, because it can’t be as flexible as it once was.”
San Francisco-based Yockey includes smaller developed markets and some emerging-market firms and is willing to build up significant stakes in individual sectors. More than one-third of Artisan International’s assets are in financial services. Telecommunications and consumer goods are other concentrations.
This “no-load” (no sales charge) fund requires a $1,000 minimum initial investment. While its annual expense ratio of 1.20 percent is less than most no-load foreign large-cap funds, Lefkovitz believes it should be lower because of its significant asset growth.
— D.H., via the Internet.
Q. My grandfather inherited stock when his parents died and now wants to gift the shares to me. How does he calculate his cost basis, and how do I calculate mine?
A. Cost basis is the original value of a stock for tax purposes.
When you inherit stock, your cost basis is the fair-market value on the date of the donor’s death. So whatever the stock was worth when your grandfather inherited it is his cost basis. When you receive it, your cost basis would be the same as your grandfather’s cost basis.
“It might make more sense in terms of tax benefit to have your grandfather hold onto the stock and include it in an inheritance, instead of giving it as a gift now,” said David Bendix, a certified public accountant and certified financial planner with Bendix Financial Group in Garden City, N.Y.
That’s because your grandfather’s cost basis could be significantly lower than the fair-market value of the stock at the date of his death. In an inheritance, you’d received a “stepped-up” basis for tax purposes, in which your basis is the fair-market value of the stock on the date of the donor’s death.
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Andrew Leckey is a Tribune Media Services columnist. E-mail him at [email protected].