Despite falling returns of foreign stock funds, experts say that there is no reason to shy away from international equities, the Associated Press reports.
The attractive valuations of overseas companies relative to domestic equities underscore the wisdom of taking a global approach, particularly due to the fact that U.S. investors are underexposed to international stocks.
"The U.S. market is only about half the world market. So, if you don't invest internationally, it's like having a car that only does left turns," said Reiner Triltsch, managing director and head of international investments at U.S. Trust. "You leave a lot of opportunity on the table."
In recent years, international equities have handily outperformed domestic stocks, prompting professional investors like Triltsch tp suggest there's potential for further good returns in the future due to a number of factors, including improving fundamentals in Europe and Japan relative to the United States.
"Investors are looking at the world in a way they did 20 years ago, saying, 'Do I want to buy U.K. companies, Japanese companies, U.S. companies?,'" noted Brett Gallagher, portfolio manager of the Julius Baer Global Equity Fund.
"The reality is, those companies have changed so much, they've diversified so much themselves, what's important is no longer the country of origin, or of incorporation, but rather the sectors and countries into which these companies have exposure."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.