3 Foreign-Stock Funds for Rebalancing in 2020
Look to these Morningstar favorites to increase your international-equity exposure.
Susan Dziubinski: Hi, I'm Susan Dziubinski for Morningstar. As a group, international stocks rebounded in 2019, yet U.S. stocks did even better, and as a result, investors may find that their portfolios are more exposed to U.S. stocks than they might think. Here are three of our favorite foreign-stock funds for bringing balance to your portfolio in 2020.
Dan Culloton: Oakmark International Small Cap is an excellent option for rebalancing because it uses a proven approach to invest in international small-cap stocks. It has a very experienced manager, David Herro, who runs Gold-rated Oakmark International, and he's ably assisted by Justin Hance and Mike Manelli, two veteran Harris Associates analysts who are also on Harris Associates' stock selection team. They use the same approach as they use at Oakmark International. They look for stocks that are trading at discounts to their estimates of their intrinsic value, and they hold on for a long period of time. They like to buy when things are under a cloud or are facing some sort of company-specific controversy, and they like to hold until their theses play out. The result is you have a portfolio that doesn't look like the index or its peers. It has a very lumpy risk/return profile. For example, in 2018, it lost about 24%, then it bounced back in 2019 with a 32% return. So, you have to be prepared to ride out some rough periods in this stock fund.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.