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Fund Spy

We're Not in a Borderless World Just Yet

Although less critical than in the past, company locations and country weightings can still matter.

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For many reasons, the country weightings of mutual fund portfolios don't carry the importance they once did. But that doesn't mean that this information has lost all meaning. At times, it can help explain past performance, offer a preview of future returns under various conditions, and offer insights into the way portfolio managers approach their mission.

Fading Boundaries
As companies have put more and more effort into selling their products worldwide, with offices and factories scattered around the globe, the location of their headquarters has become less important. When investors are wondering whether to choose  GlaxoSmithKline (GSK) over  Novartis (NVS) or  Merck (MRK), the fact that their corporate offices are in the United Kingdom, Switzerland, and the United States, respectively, typically plays little if any role in the decision.

Gregg Wolper has a position in the following securities mentioned above: DODFX. Find out about Morningstar’s editorial policies.