Experts say that global and international mutual funds can give investors a lot of options.
Foreign-based companies now make up half of the world's equity market capitalization, which is up from about a third in 1970. Foreign companies also dominate many key industries, such as oil and gas, wireless communications, and building construction.
But research shows that most U.S. portfolios still don't have enough international stocks, even though these companies offer good investment opportunities. On average, only about 5 percent of Americans' portfolios are made up of stocks and funds from outside the U.S.
Even if they don't know it, global companies affect the lives of people in the United States. Maybe it was the medicine you took before bed, the car you drove to work, or the soda you had with lunch. All of them probably came from companies that do business outside of the U.S.
ING Funds, the U.S. retail mutual fund division of ING Group, one of the largest financial services companies in the world, says that international equity markets give investors access to many key industries that are dominated by countries other than the U.S.
The mutual fund unit has just started a campaign called "Going Global" to get more people interested in investing in other countries.
Bob Boulware, president and CEO of ING Funds, said, "ING is working hard to help more people understand how the world of investing is changing." Boulware says, "Those who don't think globally may be missing out on something."
Just as an investor's domestic portfolio is usually split up to include a variety of investment options, they may want to apply the same thinking to their international portfolio by choosing a variety of sub-asset classes to be better prepared for changing international market conditions. Global and international mutual funds could be a good place for investors to start.
Global funds can give investors access to opportunities all over the world, both abroad and at home. International mutual funds might be a better choice for people who want to add foreign investments to their domestic portfolio.
Investors may want to think about the following when looking at both global and international funds:
Market Style. Find out if you want growth stocks, value stocks, or a mix of both for your international portfolio.
Capitalization of the market. Choose from small, medium, or large "size" companies based on how much all their outstanding shares are worth.
Specialized Funds. Designed for investors who want to focus their investments on a certain area or on key markets, like real estate. Some investors might want to look into a fund-of-funds with a diversified portfolio of international investments. With one investment, investors can get a foothold in a number of important international asset classes through an international fund-of-funds.
For example, the ING Diversified International Fund is a fund-of-funds that invests in a variety of international market segments, such as international growth, international value, international small capitalization stocks, and emerging markets. Some of the best international portfolio managers in the world are in charge of the fund's underlying portfolios. This makes it easier to include international asset allocation in your investment plans.
As a well-known leader in global asset management, ING Funds has focused on giving U.S. investors a mix of global and international investment opportunities through mutual funds. This is in part because it has access to more than 700 investment professionals around the world who know how markets in Europe, Asia Pacific, and the Americas work.
The latest white paper from the company is called "Seeing the Big Picture: A Global Approach to Investing." It gives an introduction to many different aspects of international investing.
