Advisors who scoured the globe for their clients were amply rewarded over the past 10 years. For example, through April 15, China funds returned 14.2% annually over the past five years, the best return of any Morningstar category. Diversified emerging-markets funds were up a more-than respectable 8.5% over the same time frame.
But advisors who may have been lulled into forgetting the risks of international investing were in for a rude awakening the past several months. Conflicts in frontier markets erupted almost daily, soon followed by the horrors of the disasters in Japan.
In three stories, we take an in-depth look at how planners and their clients are coping with the resurgence of geopolitical risk, and ways they can try to capitalize on it and mitigate it. As writer Suzanne McGee says, "The biggest challenge may be resisting client demands for quick and certain answers to what happens next in the wake of dramatic events that no one anticipated."
- Currency Play
Clients looking for diversification have new options in currency funds, ETFs and ETNs.
- On the Frontier
Under-the-radar stocks from countries not widely followed by analysts pose risks-but potentially offer growth-driven returns
- Hot Spots
When geopolitical flash points explode, advisors need to help their clients stay focused and make informed decisions