Top 5 International Mutual Funds (March 2011)

Adding a small amount of international flavor to a portfolio could go a long way to increase returns without significantly raising the associated risk. Mutual funds focusing on foreign markets diversify their portfolios by investing in both mature and developing markets. Emerging markets are of special interest since they provide appreciably higher growth than developed countries. Mutual funds are the optimal route for investors to chart international waters since they provide access to a diversified, professionally managed portfolio at a low cost.

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.

Laudus International MarketMasters (SWOIX) seeks capital growth over the long term. It invests a large proportion of its assets in equity securities of companies located outside the US. The fund invests in companies regardless of their market capitalization. The international mutual fund returned 26.52% in the last one year period.

The international mutual fund has a minimum initial investment of $100 and an expense ratio of 1.60% compared to a category average of 1.53%.

Ivy International Growth A (IVINX) invests a large share of its assets in common stocks of companies located outside the U.S. It selects firms for investment on the basis of their potential for long term growth and focuses on companies from developed countries. The international mutual fund has a five year annualized return of 3.07%.

F. Chace Brundige is the fund manager and has managed this international mutual fund since 2009.

Templeton Foreign Small Companies A (FINEX) seeks long term capital appreciation. 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 6.92%.

The international mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.59% compared to a category average of 1.49%.

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 41.09% in the last one year and has a ten year annualized return of 14.3%.

As of August 2010, this international mutual fund held 81 issues, with 5.15% of its total assets invested in Opera Software ASA.

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 9.89% 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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