George Washington, as he finished his two terms as the nation’s first president, warned his countrymen in a parting address to avoid “foreign entanglements.”

For better or worse, the nation has largely ignored that advice. So, for the most part, have portfolio strategists and financial advisors, who typically recommend that investors diversify their holdings to include some foreign stocks and bonds.

Many advisors help their clients achieve such diversification by including in their portfolios some mutual funds or exchange-traded funds comprising foreign-company stocks. But for those clients who are leery of foreign currencies, political instability, wars or secession plebiscites, there is another option to globalize a portfolio: Buy the stocks of U.S.-listed companies that book a substantial share of their revenue and earn a substantial share of their profits abroad.

Companies such as Apple Inc., The Coca-Cola, ExxonMobil, General Electric, Merck & Co. and Microsoft, for example, all fit the bill.

That means that even by simply having a client buy a large-cap domestic U.S. index fund, “exposure to foreign economies” is achieved and without ever buying a foreign stock, says Morningstar senior analyst Gregg Wolper.
Some funds push global diversification a little further and focus specifically on U.S. firms that are especially heavily invested or that sell heavily abroad.

For example, the Buffalo Growth Fund (BUFGX), offered by Kornitzer Capital Management, is a Morningstar three-star-rated fund that looks not just for companies that earn a high proportion of their profits abroad but that are seeing that share of their profits grow. The fund has a recorded a three-year average gain of 14.9%, a five-year average gain of 16.0% and a 10-year average gain of 8.9%.

Among the top 10 stocks that account for 25% of the fund’s holdings are Apple, Google, Align Technology, Baker Hughes, Facebook, EMC and Nike.

“We look for U.S. companies that have incremental growth abroad compared to what they could achieve in the U.S. market alone,” explains fund co-manager David Carlsen. “This applies to companies like Align Technologies, that make dental aligners in the U.S. that it is now selling into developed markets like Europe, and companies like Colgate or Procter & Gamble that manufacture in developing markets and sell into those markets.”

Wolper notes that an investor would get much more international diversification, for example foreign currency exposure, and more direct exposure to foreign economies, by holding a fund comprising actual foreign companies.

Carlsen agrees, but adds that in return for having less exposure to currency risk and to international economies, those investors who stick with U.S. companies get the certainty and transparency of U.S. regulation.

But both men agree that for the more “timid” investor, just buying a fund comprising U.S. companies with a major international footprint can achieve the goal of international diversification, while still adhering to President Washington’s isolationist advice.

Dave Lindorff spent five years as a China correspondent for Businessweek, and has written for The Nation and