MW A 5-star fund manager is capitalizing on Trump's global market shake-up. Here's how.

By Philip van Doorn

Matt Burdett of Thornburg Investment Management outlines his team's stock-selection methodology, which has beaten international indexes' good performance this year

"Donald Trump has been the best thing for international stock markets in a long time," according to Matt Burdett, the head of equities at Thornburg Investment Management.

That statement is backed up by this year's performance for broad international and domestic stock indexes:

All investment returns in this article include reinvested dividends. The international indexes have outperformed the large-cap U.S. benchmark S&P 500 SPX, which was flat for 2025 through Wednesday. But what may be most striking about the chart above is that the S&P 500 was down as much as 15% through April 8, as investors reacted to Trump's slew of tariff announcements on April 2.

Subsequent announcements of new trade deals or at least suspensions of some of the tariffs have helped restore confidence among U.S. investors. But the international indexes are holding solid gains for the year, as the trade conflict seems to be causing some investors to broaden their horizons.

But during an interview with MarketWatch, Burdett made it clear that he thought this year's strength for stock markets outside the U.S. was the beginning of a long-term trend. Trump's trade conflicts have "a new self-reliance movement in countries, including our allies in Europe and countries in Asia," he said. "They have to spend more money and that means more revenue and earnings." Burdett also pointed to the declining value for the dollar, which is part of the Trump administration's policy to create an easier environment for U.S. manufacturers to export their products.

"If the dollar is depreciating, which it has not done in a long time, it makes foreign portfolios worth more, just standing there," he said.

Burdett and his team at Thornburg, based in Santa Fe, N.M., take a long-term view. The firm's $3.4 billion Thornburg International Equity Fund was launched in 1998. This fund's Class A TGVAX and Class I TGVIX shares are rated five stars (the highest rating) within Morningstar's Foreign Large Blend category. And the fund has been outperforming its benchmark (the MSCI AC World Index ex-U.S., shown above) this year with a 17.3% return for the Class A shares through Wednesday, and a 17.4% return for the Class I shares.

Those returns are net of expenses, which come to 1.28% of assets annually for the Class A shares and 0.90% for the Class I shares. The returns don't reflect any sales charges paid to purchase Class A shares. The sales charges can be as high as 4.5% but might be waived in whole or in part depending on how the shares are purchased. The Class I shares don't have sales charges, but account minimums might be higher for this class, again depending on how shares are purchased.

Burdett also discussed Thornburg's new international exchange-traded fund, which follows a similar strategy.

A lower-cost approach to developed markets outside the U.S.

The Thornburg International Equity ETF TXUE was launched on Jan. 21, and FactSet's performance data for the new fund runs from Jan. 22.

Through Wednesday, the fund had returned 13.8%, ahead of the 4.8% return over the same period for the MSCI EAFE Index. That underscores two important differences between the new ETF and the Thornburg International Equity Fund. The ETF focuses on developed markets for the most part, and it has lower annual expenses of 0.65% of assets under management.

One exception to the fund's focus on developed markets is Taiwan Semiconductor Manufacturing Co. $(TSM)$. This company has American depositary receipts available for trading under the TSM ticker; however, Burdett said that the ADR trades at a premium of almost 20% to the company's locally listed shares (TW:2330).

He said that Taiwan Semiconductor was an "unusual case" with such a high premium for the ADR, which he said might reflect some U.S. investors' lack of access to the shares listed on the Taiwan Stock Exchange.

When asked about how he and his team selected stocks, Burdett said Thornburg had a tradition of thinking about three "baskets" for portfolio construction and then "three pillars of an investment."

Here are the three baskets, or categories of companies held by the fund, that Burdett described:

-- Basic value. A business in this category "has a cyclical earnings or cash-flow stream determined by an external force," he said. Examples would include oil producers or financial companies whose profits are tied to interest-rate cycles.

-- Consistent earner. A company in this category will see demand for its products or services hold steady through economic cycles.

-- Emerging franchise. "These are going to be businesses that are growing faster than the rest of the portfolio," Burdett said. Some might be disrupting their industries or operating within markets that are growing rapidly. This basket is the smallest of the three, he said.

And here are the three pillars, or attributes the Thornburg team is looking for when selecting stocks within the above categories:

-- Underappreciated opportunity. This refers to stocks that are priced attractively because of market disruptions or performance challenges that the Thornburg team expects to be temporary. Burdett said Russia's invasion of Ukraine in February 2022 provided an example. The concurrent disruption of the flow of natural gas from Russia to Western Europe led to a spike for gas prices and "a selloff of European utilities," he said. "I went to Europe after the invasion, met with policy makers in Germany, which was the country most dependent on Russian gas, and figured it was a good opportunity to get into some European utilities," he said.

-- Resilient foundation. This means looking within industries to find companies with the most robust cash flows. Burdett said this could lead to underperformance through bull markets but would also lower risk in down markets.

-- Ability to execute. In addition to having confidence in a company's management team, Burdett wants to know: "Do they have the right business model to ... get the market to see the value?" Even if they don't, an investment will still be considered if the Thornburg team believes a company is making "the best investments to close the gap," he said.

Three examples

Burdett named three examples of companies held by the Thornburg International Equity ETF that fit into each of the baskets:

-- The fund's largest holding is Orange S.A. FR:ORA, a telecommunications services provider based in France that also has market share in Belgium, Spain and in French-speaking countries in Africa. This stock fits within the "steady earner" bucket, Burdett said. For five years through 2024, the locally listed shares of the company returned only 1.4%. But the stock was up 38.5% for 2025 through Wednesday and it traded at a forward price-to-earnings ratio of 13.8, according to FactSet. That isn't a high P/E when compared with the S&P 500's forward P/E of 21.2 and the P/E of 14.7 for the iShares MSCI EAFE ETF EFA. Burdett said that Orange was benefiting from improvements to the quality of its network and the anticipation that it will be able to raise prices if its competitor SFR is sold. There have been reports in Bloomberg this week that billionaire investor Patrick Drahi is considering selling his controlling stake in SFR. "Typically when a market goes from four players to three, the profit pool grows overall because pricing is less competitive. Orange would likely not be a buyer of SFR's assets but they would benefit from the profit pool growing," Burdett said.

-- TotalEnergies SE FR:TTE is an example of a stock in the "basic value" bucket, Burdett said. In addition to its traditional oil and gas production business, Total was "the largest off-taker of U.S. liquid natural gas, which they trade around the world, especially in Europe," he said, and was taking a balanced approach to expanding sustainable energy resources while also focusing on natural gas, which is "not only the best transitional fuel, it is reliable."

-- Within the "emerging franchise" bucket, Burdett named Galaxy Entertainment Group Ltd. GXYYY, which is based in Hong Kong and operates casinos in Macau. He called this company "a pretty simple story" because of its advantage as a locally based operator. "When you think about expansion, they are probably going to have an advantage over a U.S. player," he said.

Here are the top 10 stock holdings of the Thornburg International Equity ETF as of Wednesday:

   Company                       Ticker   Country       % of Thornburg International Equity ETF 
   Orange S.A.                   FR:ORA   France                         3.8% 
   E.ON SE                       XE:EOAN  Germany                        3.3% 
   AstraZeneca PLC ADR           AZN      U.K.                           3.3% 
   NN Group N.V.                 NL:NN    Netherlands                    3.1% 
   BNP Paribas S.A.              FR:BNP   France                         2.9% 
   Safran S.A.                   FR:SAF   France                         2.8% 
   Iberdrola S.A.                ES:IBE   Spain                          2.6% 
   TotalEnergies SE              FR:TTE   France                         2.5% 
   L'Oreal S.A.                  FR:OR    France                         2.4% 
   ING Groep N.V.                NL:INGA  Netherlands                    2.4% 
                                                                    Sources: Thornburg, FactSet 

Click on the tickers for more about any stock, index or fund.

Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page

Don't miss: Capital One's stock looks like a bargain following Discover acquisition

-Philip van Doorn

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

MW A 5-star fund manager is capitalizing on Trump's global market shake-up. Here's how.

By Philip van Doorn

Matt Burdett of Thornburg Investment Management outlines his team's stock-selection methodology, which has beaten international indexes' good performance this year

"Donald Trump has been the best thing for international stock markets in a long time," according to Matt Burdett, the head of equities at Thornburg Investment Management.

That statement is backed up by this year's performance for broad international and domestic stock indexes:

All investment returns in this article include reinvested dividends. The international indexes have outperformed the large-cap U.S. benchmark S&P 500 SPX, which was flat for 2025 through Wednesday. But what may be most striking about the chart above is that the S&P 500 was down as much as 15% through April 8, as investors reacted to Trump's slew of tariff announcements on April 2.

Subsequent announcements of new trade deals or at least suspensions of some of the tariffs have helped restore confidence among U.S. investors. But the international indexes are holding solid gains for the year, as the trade conflict seems to be causing some investors to broaden their horizons.

But during an interview with MarketWatch, Burdett made it clear that he thought this year's strength for stock markets outside the U.S. was the beginning of a long-term trend. Trump's trade conflicts have "a new self-reliance movement in countries, including our allies in Europe and countries in Asia," he said. "They have to spend more money and that means more revenue and earnings." Burdett also pointed to the declining value for the dollar, which is part of the Trump administration's policy to create an easier environment for U.S. manufacturers to export their products.

"If the dollar is depreciating, which it has not done in a long time, it makes foreign portfolios worth more, just standing there," he said.

Burdett and his team at Thornburg, based in Santa Fe, N.M., take a long-term view. The firm's $3.4 billion Thornburg International Equity Fund was launched in 1998. This fund's Class A TGVAX and Class I TGVIX shares are rated five stars (the highest rating) within Morningstar's Foreign Large Blend category. And the fund has been outperforming its benchmark (the MSCI AC World Index ex-U.S., shown above) this year with a 17.3% return for the Class A shares through Wednesday, and a 17.4% return for the Class I shares.

Those returns are net of expenses, which come to 1.28% of assets annually for the Class A shares and 0.90% for the Class I shares. The returns don't reflect any sales charges paid to purchase Class A shares. The sales charges can be as high as 4.5% but might be waived in whole or in part depending on how the shares are purchased. The Class I shares don't have sales charges, but account minimums might be higher for this class, again depending on how shares are purchased.

Burdett also discussed Thornburg's new international exchange-traded fund, which follows a similar strategy.

A lower-cost approach to developed markets outside the U.S.

The Thornburg International Equity ETF TXUE was launched on Jan. 21, and FactSet's performance data for the new fund runs from Jan. 22.

Through Wednesday, the fund had returned 13.8%, ahead of the 4.8% return over the same period for the MSCI EAFE Index. That underscores two important differences between the new ETF and the Thornburg International Equity Fund. The ETF focuses on developed markets for the most part, and it has lower annual expenses of 0.65% of assets under management.

One exception to the fund's focus on developed markets is Taiwan Semiconductor Manufacturing Co. (TSM). This company has American depositary receipts available for trading under the TSM ticker; however, Burdett said that the ADR trades at a premium of almost 20% to the company's locally listed shares (TW:2330).

He said that Taiwan Semiconductor was an "unusual case" with such a high premium for the ADR, which he said might reflect some U.S. investors' lack of access to the shares listed on the Taiwan Stock Exchange.

When asked about how he and his team selected stocks, Burdett said Thornburg had a tradition of thinking about three "baskets" for portfolio construction and then "three pillars of an investment."

Here are the three baskets, or categories of companies held by the fund, that Burdett described:

-- Basic value. A business in this category "has a cyclical earnings or cash-flow stream determined by an external force," he said. Examples would include oil producers or financial companies whose profits are tied to interest-rate cycles.

-- Consistent earner. A company in this category will see demand for its products or services hold steady through economic cycles.

-- Emerging franchise. "These are going to be businesses that are growing faster than the rest of the portfolio," Burdett said. Some might be disrupting their industries or operating within markets that are growing rapidly. This basket is the smallest of the three, he said.

And here are the three pillars, or attributes the Thornburg team is looking for when selecting stocks within the above categories:

-- Underappreciated opportunity. This refers to stocks that are priced attractively because of market disruptions or performance challenges that the Thornburg team expects to be temporary. Burdett said Russia's invasion of Ukraine in February 2022 provided an example. The concurrent disruption of the flow of natural gas from Russia to Western Europe led to a spike for gas prices and "a selloff of European utilities," he said. "I went to Europe after the invasion, met with policy makers in Germany, which was the country most dependent on Russian gas, and figured it was a good opportunity to get into some European utilities," he said.

-- Resilient foundation. This means looking within industries to find companies with the most robust cash flows. Burdett said this could lead to underperformance through bull markets but would also lower risk in down markets.

-- Ability to execute. In addition to having confidence in a company's management team, Burdett wants to know: "Do they have the right business model to ... get the market to see the value?" Even if they don't, an investment will still be considered if the Thornburg team believes a company is making "the best investments to close the gap," he said.

Three examples

Burdett named three examples of companies held by the Thornburg International Equity ETF that fit into each of the baskets:

-- The fund's largest holding is Orange S.A. FR:ORA, a telecommunications services provider based in France that also has market share in Belgium, Spain and in French-speaking countries in Africa. This stock fits within the "steady earner" bucket, Burdett said. For five years through 2024, the locally listed shares of the company returned only 1.4%. But the stock was up 38.5% for 2025 through Wednesday and it traded at a forward price-to-earnings ratio of 13.8, according to FactSet. That isn't a high P/E when compared with the S&P 500's forward P/E of 21.2 and the P/E of 14.7 for the iShares MSCI EAFE ETF EFA. Burdett said that Orange was benefiting from improvements to the quality of its network and the anticipation that it will be able to raise prices if its competitor SFR is sold. There have been reports in Bloomberg this week that billionaire investor Patrick Drahi is considering selling his controlling stake in SFR. "Typically when a market goes from four players to three, the profit pool grows overall because pricing is less competitive. Orange would likely not be a buyer of SFR's assets but they would benefit from the profit pool growing," Burdett said.

-- TotalEnergies SE FR:TTE is an example of a stock in the "basic value" bucket, Burdett said. In addition to its traditional oil and gas production business, Total was "the largest off-taker of U.S. liquid natural gas, which they trade around the world, especially in Europe," he said, and was taking a balanced approach to expanding sustainable energy resources while also focusing on natural gas, which is "not only the best transitional fuel, it is reliable."

-- Within the "emerging franchise" bucket, Burdett named Galaxy Entertainment Group Ltd. GXYYY, which is based in Hong Kong and operates casinos in Macau. He called this company "a pretty simple story" because of its advantage as a locally based operator. "When you think about expansion, they are probably going to have an advantage over a U.S. player," he said.

Here are the top 10 stock holdings of the Thornburg International Equity ETF as of Wednesday:

   Company                       Ticker   Country       % of Thornburg International Equity ETF 
   Orange S.A.                   FR:ORA   France                         3.8% 
   E.ON SE                       XE:EOAN  Germany                        3.3% 
   AstraZeneca PLC ADR           AZN      U.K.                           3.3% 
   NN Group N.V.                 NL:NN    Netherlands                    3.1% 
   BNP Paribas S.A.              FR:BNP   France                         2.9% 
   Safran S.A.                   FR:SAF   France                         2.8% 
   Iberdrola S.A.                ES:IBE   Spain                          2.6% 
   TotalEnergies SE              FR:TTE   France                         2.5% 
   L'Oreal S.A.                  FR:OR    France                         2.4% 
   ING Groep N.V.                NL:INGA  Netherlands                    2.4% 
                                                                    Sources: Thornburg, FactSet 

Click on the tickers for more about any stock, index or fund.

Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page

Don't miss: Capital One's stock looks like a bargain following Discover acquisition

-Philip van Doorn

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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