Key Morningstar Metrics for Brandes U.S. Equity Fund
- : GoldMorningstar Medalist Rating
- : Above AverageProcess Pillar
- : HighPeople Pillar
- : Above AverageParent Pillar
- : Actively ManagedIndex/Active
A group of experienced and highly committed value investors who execute a rigorous, patient, and contrarian bottom-up process gives Brandes US Value an edge. It retains a People Pillar rating of High and a Process Pillar rating of Above Average.
The strategy, whose roots date back to 1991, is in the capable hands of Brent Fredberg, Ted Kim, Kenneth Little, and Brian Matthews, who have formed the firm’s global large-cap investment committee since 2013. All four are well-versed in Brandes’ investment philosophy, have been with the firm for more than two decades, and manage the strategy in a very collegial manner. Apart from their vast investment experience, high stability, and coinvestments in the strategy, they stand out for their intense collaboration, long-term investment horizon, contrarian mindset, and unwavering commitment to their value-oriented investment approach. The four members, and the more than 20 sector analysts and portfolio managers who support them, are global sector experts. Their bottom-up fundamental stock research plays a critical role in the investment process. Interaction with the analyst team is well-organized, while the decision-making structure within the portfolio manager team encourages debate and diversity of thought, deepens their understanding of companies and industries, and helps to avoid value traps.
The approach is applied shopwide, ensuring full alignment among portfolio managers and analysts with their value-oriented, bottom-up, and benchmark-agnostic approach. Brandes’ strong investment culture ensures a disciplined execution of the well-structured, repeatable, and robust investment process. The managers seek to exploit behavioral biases that lead to mispriced securities and take advantage of these opportunities when a stock trades at a meaningful discount to their collective estimate of intrinsic value, using margin of safety as a key driver of position sizing. While the approach is proven and has delivered strong results over time through effective stock selection, the search for value can sometimes lead the managers into a value trap.
The track record since the global large-cap investment committee was formed in 2013 has been excellent relative to peers and the Morningstar US Large-Mid Cap Broad Value Index over various time periods. This is even more impressive given the strategy’s stronger value bias over this period, coupled with a meaningful underperformance of the value style. While the strategy’s performance has been encouraging, its longer track record shows that it is not without risks, as its poor performance during the 2008 global financial crisis painfully demonstrated. Investors should therefore be prepared to accept higher volatility and the potential for returns to deviate from Morningstar Category peers and the index in order to reap the rewards over the long term.
Brandes U.S. Equity Fund: Performance Highlights
The track record since the global large-cap investment committee was formed in 2013 has been excellent. From February 2013 until the end of July 2026, the fund, as measured by the Ireland-domiciled I USD ACC class, has generated an annualized return of 13.57%, clearly outperforming the US large-cap value category average of 9.60% and beating the Morningstar US Large-Mid Cap Broad Value Index’s 13.22% annualized return. This is even more impressive given the strategy’s stronger value bias over this period, coupled with the value style’s meaningful underperformance. The strategy typically excelled when value stocks were in vogue, like in 2016 or 2022, but also held up fairly well in less favorable markets like 2020. More recently, the strategy has comfortably beaten its average peer in 2024 and 2025 and landed in the middle of the pack over the first half of 2026. Key contributors over the period were Flex, Micron Technologies, BNY, and Citigroup, while Fortrea Holdings, Fiserv, and Amdocs held back performance.
Long-term performance has been driven by effective stock selection, which has been additive in most calendar years, particularly in healthcare, consumer cyclical, and consumer defensive. The financials and energy sectors have been more challenging. Although the strategy’s performance since the formation of the global large-cap investment committee in 2013 has been encouraging, its longer track record shows it is not without risks, as its poor performance during the 2008 global financial crisis painfully demonstrated.
Despite its potential for more volatile returns and large relative performance deviations, risk-adjusted returns over various time horizons indicate that investors have been well-compensated for the risk taken. Investors should be prepared to accept higher volatility and the potential for returns to deviate from category peers and the index in order to reap the rewards over the long term.
