The key benefit that global mutual funds provide is diversification since they invest in overseas markets while also holding domestic equities. Thus, they make good additions to a portfolio weighted in favor of domestic investments. The tepid economic climate in mature markets such as Europe and the US has led global fund managers to look for better opportunities in emerging markets which may also imply dealing with greater volatility However, it has been observed over the years that a judicious combination of foreign and domestic investments generate better returns at lower levels of risk.
Below we will share with you 5 top rated global mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.
Wells Fargo Advantage Global Opportunities A (EKGAX) seeks capital appreciation. The fund invests the majority of its assets in small and mid-cap companies which are within the market cap range of the S&P Global Small/Mid Cap index. The global mutual fund has a five year annualized return of 6.24%.
Francis X. Claro is the fund manager has managed this global mutual fund since 1999.
JHancock3 Global Shareholder Yield A (JGYAX) invests heavily in a wide range of income generating equity securities worldwide. Up to 20% of its assets are invested in emerging market securities. Not more than 15% of its assets may be invested in illiquid investments. This global mutual fund has a three year annualized return of 2.88%.
The global fund has a minimum initial investment of $2,500 and an expense ratio of 1.55% compared to a category average of 1.50%.
Dodge & Cox Global Stock (DODWX) seeks both income and capital growth. It invests in a wide range of companies from a minimum of three different countries, which includes emerging markets. The global fund invests a significant portion of assets in foreign securities. The fund returned 22.63% in the last one year period. As of December 2010, this global mutual fund held 95 issues, with 7.07% of its total assets invested in Fixed Income Clearing Corporation Repurchase Agreement.
American Funds Capital World Growth & Income A (CWGIX) primarily invests in common stock of companies worldwide. These securities denominated in U.S. dollars or other currencies. Cash and money market instruments are also part of the fund’s portfolio. This global mutual fund has a ten year annualized return of 8.04%.
Jeanne M. Carroll is the fund manager and she has managed this global mutual fund since 2004.
Russell Global Equity A (RGEAX) seeks capital growth over the long term. The fund invests heavily in equity securities issued by domestic and foreign companies. It aims to widely diversify its investments to reflect asset allocation in a number of countries. This global mutual fund returned 24% over the last one year period.
The global mutual fund has an expense ratio of 1.49% compared to a category average of 1.50%.
To view the Zacks Rank and past performance of all global mutual funds, then click here.