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International developed markets continued to lose ground during the quarter. As of September 30, no country or economic sector represented in the MSCI EAFE Index had positive returns for the one-month, three-month, year-to-date or one-year time periods. (The same was true for the U.S. and Canada.) While the Fund also posted a negative return for the quarter, it did outperform its MSCI EAFE (net dividends) benchmark. Value stocks tended to have strong relative performance for the quarter. Given the Fund's value bias, this was the factor that had the largest positive impact on the Fund's performance for the quarter, relative to its benchmark. The quantitative model used in the management of the Fund assumes that stocks whose earnings estimates are revised upward will outperform those whose earnings estimates are reduced. That assumption did not hold true for the third quarter, and this had a negative impact on the Fund's relative return. The absolute performance of the Fund was hurt by the strengthening of the U.S. dollar.
In addition to being helped by the strong relative performance of value stocks, the Fund benefited from the strong relative performance of its materials and telecommunications services sectors. Australian holdings also had a significant positive impact on relative returns. Among the Fund's individual holdings, Volkswagen AG (1.1% of the Fund) was the top contributor to relative performance. The company continued to exceed global sales expectations.
Holdings in the industrials sector, as well as the Fund's holdings of Japanese stocks, had a negative impact on the Fund's relative return for the quarter. Royal Dutch Shell PLC (2.5% of the Fund), one of the top contributors to Fund performance last quarter, was one of the biggest detractors from relative performance in the third quarter. The company was hurt by the decline in oil prices.
We believe that the depressed equity markets offer a tremendous buying opportunity. While the absolute bottom of the market is difficult to predict, our view is that there are excellent long-term prospects for equities purchased at these levels. Historically, our "value with a catalyst" approach has performed well in this type of environment. It is also important to note that more than half of the world's equity investment opportunities lie outside the United States. We believe our disciplined investment approach provides investors with exposure to many of these opportunities. When added to a portfolio of U.S. securities, our international investment discipline has the potential to increase diversification, while improving return and reducing risk.
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Past performance does not guarantee future results.
An investor should consider the Fund's investment objectives, risks, and charges and expenses carefully before sending money. This and other important information about the investment company can be found in the Fund's prospectus. To obtain a prospectus, please click here. Please read the prospectus carefully before investing.
RISKS
Investments in foreign securities involve additional risks due to currency fluctuations, economic and political conditions, and differences in financial reporting standards.
Fund holdings mentioned in the manager commentary are as of 9/30/08. The portfolio holding information provided should not be considered as a recommendation to purchase or sell a particular security. There is no assurance that the securities mentioned remain in the Fund's portfolio or that securities sold have not been repurchased.
The statements and opinions expressed are those of the author(s) and do not necessarily represent the views of Munder Capital Management as a firm or the Munder Funds. While the information and statistical data contained in this material are based on sources believed to be reliable, it is current as of the time made and is subject to change without notice. Further, the information presented is general in nature and is not intended to provide personal investment advice or as an endorsement of any specific investment. The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it.
Munder Funds distributed by Funds Distributor, LLC.
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Timothy S. Wittman, CFA
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| Managing Director, Alternative and Quantitative Investments |
| BS in Finance with distinction from Indiana University |
| MBA in Finance from Indiana University |
| Joined Munder Capital Management in 2005 |
| Years of Experience:21 |
| Focus:Leader of the team responsible for quantitative and alternative equity investment disciplines at Munder Capital, including the Munder International Equity Fund as well as separately managed quantitative and alternative portfolios. He also leads Alternative Investments for Pierce Street Advisors, a subsidiary of Munder Capital. |
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Brian E. Kozeliski, CFA
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| Portfolio Manager |
| BA in Mathematics and Spanish from Willamette University |
| MBA with distinction in Finance from Thunderbird The Garvin School of International Management |
| Joined Munder Capital Management in 1999 |
| Years of Experience:10 |
| Focus:Member of the team responsible for managing the Munder International Equity Fund and the Munder Asset Allocation-Balanced Fund. Also provides quantitative research, including attribution analysis, for all of Munder Capital’s equity investment disciplines as a member of the firm’s quantitative support group. |
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Armando J. Lacayo
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| Director, Quantitative Analysis & Portfolio Manager |
| BS in Mathematics from The American University |
| MBA from the Massachusetts Institute of Technology |
Joined Munder Capital in August, 2000, provided research services to Munder as an independent consultant from June 2003 through August 2004, and rejoined the firm as an employee in
August 2004.
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| Years of Experience:13 |
| Focus:Provides quantitative research, including attribution analysis, for all of Munder Capital's equity investment styles. Also manages the Quantitative Support group and is a member of the team responsible for managing the Munder International Equity Fund. |
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| Munder Funds distributed by Funds Distributor, LLC. |
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