Morningstar: The Importance of Investing Abroad

In a recent interview, Morningstar’s Alex Bryan, director of passive strategies research in North America, offered insights regarding how investors might approach foreign exposure in their portfolios. Here are some highlights: Even though international stocks tend to be a bit more volatile than U.S. stocks because they are priced in foreign currency, Bryan says, diversifying is important because U.S. stocks go through periods of underperformance relative to international shares. Bryan says that international stocks can… Read More

Southern Europe Weathering Stormy Markets

As market volatility increases, one region that seems to be keeping a firm footing is Southern Europe, according to a recent article in The Wall Street Journal, that says, “If the events of 2018 haven’t dented the global growth outlook too much, then that could persist.” Italian, Portuguese and Greek stock markets are all in positive territory this year, the article reports, and Southern European government bonds are also performing well. “The mix of good bond-market… Read More

Equity Investors Should Look to Europe

To get the most out of the global recovery, equity investors should look to Europe. This according to a recent Bloomberg article. In an interview last week, Bjorn Lind, a portfolio manager at Sweden-based AMF Fonder AB, said: “Earnings growth will be better in Europe in the coming years and, most importantly, longer.” Lind says AMF Fonder is overweight Europe and underweight North America in its global funds, but he sees economic growth and some… Read More

Goldman: Fund Managers Relying Too Heavily on U.S. Stocks

An analysis of professionally managed investment portfolios revealed to a team of Goldman strategists that “many investors are missing important potential sources of return as a result of putting too many of their “risk” eggs in one basket—U.S. equities.” This according to a recent article in Barron’s. The article argues that many portfolios appear to be overlooking “potentially attractive” opportunities in emerging market, emerging market debt and small-cap equities (in Japan, Europe and other non-U.S.… Read More

Australian Hedge Fund Produces 23% Annual Returns by Staying Clear of Commodities

While many foreign investors may consider Australia a mining stockpile to feed China’s growth, one hedge fund proves otherwise. In a recent Barron’s profile, Marcus Hughes of LHC Capital explains how, since its inception in 2011, the $195 million Australia High Conviction fund has enjoyed annualized gains of more than 23% by avoiding the “meltdown” in commodity prices. LHC has purchased mostly small-cap (under Australian dollar 1 billion, roughly US$750 million) Australian stocks which they… Read More

Investing Internationally: Countries or Companies?

The topic of global investing through allocating country risk was addressed in a recent CFA Institute interview with NYU finance professor Aswath Damodaran. While the goal of this approach is to minimize risk through maximizing diversified country exposure, Damodaran believes that much of it is misguided. “Here’s the strange thing: You don’t even have to leave your domestic market if you’re an American or a European to get country risk exposure.” He asserts that, by just… Read More