UMB Scout International Fund's Jim Moffett is a guest on Fox Business News

June 26, 2008

Time:	10:22 AM CT
Station:	Fox Business News
Location:	National Cable
Program:	Fox Business News

Dagen McDowell, Co-Anchor: Talk about stellar performance, well listen up. Jim Moffett, he runs the Scout Investment Advisors-he's the chairman there at UMB Scout and leads both the International and newly launched International Discovery Funds. The international fund, over a ten-year period, has beaten ninety-three percent of its peers. And, it's also held up in what has been a very tough environment for international stocks this year.

Jim, my first question to you is, how the heck did you do it? Because you're only down about five percent. You're really doing well this year.

James Moffett, Lead Portfolio Manager, UMB Scout International Fund: Well, some is what we didn't do. We've been underweighted in financials, and that's probably the biggest single contributor. Some of it's a cultural bias that goes against financials because of the lack of the transparency, because you don't know really what's inside them. And that bias has paid off.

And then, within that sector, we've had a fairly conservative attitude looking at what we do invest in. So that in general financials have worked fairly well. We've had an overexposure relatively to insurance companies and underexposure in banks. And then we've had some banks that've held up fairly well.

McDowell:But, you've also been underweighted slightly-and, it might have changed recently-but, to industrials and materials, as well. What's your thinking there?

Moffett: It's basically a neutral weight. Industrials is a real grab-bag of everything from airlines to chemical companies. Part of our orientation at this point is that we think there is a cyclical slowdown going on in the world.

McDowell: Mm-hmm.

Moffett: Led by the good ol' U.S. of A. And, within that you don't want to own discretionaries, you don't want to own as many industrials, and stuff like that. Some of that's on purpose. Now, the materials sector, most of that's fertilizer, a lot of it is. And, energy is, you know, we view them as kind of interchangeable. We're about equal weight in the energy sector. Or, a little overweight.

McDowell: And Petrobras is a huge holding for you. But, if you're worried about a slowdown, why would you want your money in energy stocks? If the slowdown doesn't affect energy consumption?

Moffett: Well, we think the energy crunch is for real. The supply/demand balance is tight. The demand from the emerging markets like China and India, in particular, is real. And, it's gonna be a while before that works out. And, supply changes very slowly, and in this country, we're finally responding to price and slowing down our consumption a little bit. But, in the rest of the world consumption is still growing and so we think energy is still a good place to be.

McDowell: And, you're starting to like Japan a lot more, which has been a heartbreak kid for a lot of people...

Moffett: Right.

McDowell: ...for a long time.

Moffett: And, it's been a very frustrating place for us. We have historically been underweight in Japan, and we still are. But, you look at Japan, and other than the Americas, Japan's been the best performing area of the major markets in the world. It's, frankly, somewhat to our surprise, but, we're using the export-oriented companies. We've had a frustrating time with the domestic consumer stocks, and so we're emphasizing the exporters more.

McDowell: Jim, it was great to see you.

Moffett:Okay.

McDowell: And, I must note, you were International Manager of the Year, Runner-up for Morningstar.

Moffett: Runner-up, right.

McDowell: Twice. So, you keep this up, maybe you get that title.

Moffett: One of these days.

McDowell: One of these days. But, shareholders are very happy. Jim Moffett, great to see you. Thank you so much.

Moffett: Thank you. Good to see you.