Speaking from their corporate head office in Baltimore, Vitol Capital Management spokes person, John Page explained how they are advising some of their global clients not to overlook core International funds that are currently generating substantial gains.
Mr Page began his speech by saying “We have long counseled investors to look beyond the shorter-term category leaders and to consider the strategic differences among peers as they pick funds. That advice is particularly relevant these days for those who are seeking core international holdings. Foreign large-cap and world-stock funds that pay significant attention to opportunities at the lower end of the market-cap spectrum or in the developing world have tended to shine in recent years, while those that concentrate on blue chips from developed markets have generally posted more lackluster results. This is because smaller -cap stocks and emerging-markets issues have been at the forefront of the long and strong overseas rally.”
Mr Page then went on to say” Wide-ranging core international funds certainly have their merits--and a number of them have much more than their recent success going for them--but these funds certainly aren't for everyone. Their taste for smaller-cap stocks and emerging-markets issue comes with a variety of risks, so they tend to be too aggressive for cautious investors. And their breadth makes it challenging to combine them with dedicated small-cap and emerging-markets offerings in a multi-fund international portfolio.”
He further continued by saying “Meanwhile, conservative core international funds still have real appeal despite their generally uninspiring results of late. Their emphasis on blue chips from developed markets serves to dampen volatility, which should be of particular interest to risk-averse investors. It's relatively easy to combine them with supplemental international holdings. And such funds will enjoy a pronounced tailwind when blue chips from developed markets move to the fore, while their wide-ranging peers will face a headwind.”
He finished off by saying “With all this mind, we think it's a good time to highlight six conservative foreign large-cap and world-stock funds that we like. Some of these funds are pretty well known, while others are not, but all of them have considerable merit.”
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