Travel the World With These Topnotch Funds
These world-stock funds make notable international offerings.
Going global is back in vogue. After bleeding assets during the first two months of 2011, international stock funds saw net inflows of $6.7 billion dollars in March and then another $7.1 billion in April, according to the latest fund flows report.
Although the diversified emerging-markets and world-allocation categories have garnered the largest amount of new assets, investors also appeared to be warming up to the world-stock category, which houses funds that have few geographical limitations. Although funds in the category have seen roughly $11 billion in outflows during the past year, the group has recently seen modest inflows.
Such funds can make worthy linchpins in investor portfolios. Against an uncertain economic environment, geographic flexibility holds great appeal. Moreover, given that multinationals often derive a large share of their revenues overseas, seeking investments via country of domicile has become an increasingly irrelevant consideration in portfolio construction. To that end, unconstrained global investing has become a sought-after way of dipping into a variety of areas of the market. This strategy allows managers to invest globally, and many such managers also hold stocks of any size or sector without adhering to a specific benchmark. They also have the flexibility to put money to work where they see value and build portfolios with meaningful diversification.
Using the Premium Fund Screener, we homed in on worthy options within the world-stock category. We then filtered for noninstitutional funds that were open to new investor dollars. On the fees front, we eliminated load funds that sport expenses greater than the category average. We further narrowed our universe by focusing on funds with managers who have helmed the fund for at least five years. Finally, we layered on a screen for funds with available Analyst Reports and Morningstar Ratings of 4 or 5 stars. When we eliminated multiple share classes of the same fund, the screener yielded six offerings. Below, we've highlighted three of those. Click here to replicate this screen.
Esther Pak does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.