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Fund Spy

Evaluating the Different World-Stock Formats

Each option, including owning no world-stock funds at all, has its pros and cons.

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Last month, I wrote about the three noteworthy world-stock funds offered by a single moderately sized shop, Artisan. The column focused specifically on that trio of funds, it did not go into detail about the distinctions between the two main camps of world-stock funds in general or how investors should approach global investing in light of that divide. Anyone interested in this area, though, should consider those issues before selecting a fund.

Don’t Worry, I've Got This
One way to run a world-stock fund is to hand control of the entire portfolio to a single manager or team. By making no distinction between stock selection in the United States and abroad, this method allows the manager to compare like with like across borders, choosing the best options in all cases. Such funds tend not to assign specific target allocations for U.S. and foreign stocks. Some investors would applaud the freedom that this strategy affords managers, saying this is why they own a global fund in the first place.

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