More mutual fund groups are launching asset-allocation funds with greater overseas diversification. However, unlike global funds that purchase foreign stocks worldwide, the new generation of products are funds-of-funds.

A number of investment companies, including American Century, MFS Investments and HighMark Funds, recently launched asset-allocation funds-of-funds specifically to help investors do a better job of diversifying their assets, and these funds have noticeably significant overseas weightings. Although one-third of all mutual fund shareholders invest in foreign stock funds, according to the Investment Company Institute, foreign fund holdings represent only about 5% of mutual fund shareholder assets.

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