Top 5 International Mutual Funds (Jan. 2011)

Investors whose portfolios have a strong domestic flavor would do well to consider international funds. Equity markets abroad now make up more than half of the world’s equity market capitalization. Moreover, emerging markets offer particularly exciting opportunities because of their untapped potential and impressive growth numbers. This has led to a clear preference for financial products with an international focus in recent times. Mutual funds offer a relatively less risky option for those looking to invest in this sector.

Below we will share with you 5 top rated international mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.

Fidelity International Small Cap Opportunities (FSCOX) seeks capital appreciation. The fund primarily invests in foreign securities, including those issued from developing nations. It focuses on investing in companies whose market capitalizations do not exceed $5 billion. The international mutual fund returned 23.3% in the last one year period.

The international mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.64% compared to a category average of 1.63%.

Marsico International Opportunities (MIOFX) invests at least 65% of its assets in common stocks of foreign companies. The fund invests in firms across the world regardless of their size. It seeks out companies with the potential to deliver superior growth over the long term. The international mutual fund has a five year annualized return of 2.83%.

As of November 2010, this international mutual fund held 67 issues, with 3.63% of its total assets invested in Li & Fung Ltd.

Templeton Foreign Small Companies A (FINEX) seeks long term capital growth. It invests the majority of its assets in smaller companies located abroad, including those based out of emerging market countries. The companies which it invests in have market capitalizations between $2 billion and $4 billion. The international mutual fund has a ten year annualized return of 7.37%.

Bradley Radin is the fund manager and has managed this international mutual fund since 2007.

Oppenheimer International Small Company A (OSMAX) primarily invests in companies located outside the U.S. or having primary operations in other countries. At least 80% of its assets are invested in small-cap companies. The international mutual fund returned 37.19% in the last one year and has a ten year annualized return of 15.19%.

The international mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.28% compared to a category average of 1.63%.

First Investors International A (FIINX) seeks capital growth. The fund focuses on acquiring common stocks and other equity securities issued by foreign companies. It primarily invests in large and mid-cap firms, but may also consider smaller companies. The international mutual fund returned 12.06% in the last one year period.

Rajiv Jain is the fund manager and has managed this international mutual fund since 2006.

To view the Zacks Rank and past performance of all international mutual funds, then click here.

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