Domestic investors can no longer ignore the tremendous opportunities represented by foreign equity markets. Apart from mature and developed economies, such as those located in Europe, developing markets have emerged as increasingly lucrative investment destinations. This is because they continue to grow at a rapid pace unaffected by the economic slowdown in other parts of the world. Mutual funds help in managing the unique risks associated with the sector and provide a secure route for investors to venture into international markets.
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.
American Century International Discovery (TWEGX) seeks capital appreciation. The fund invests heavily in equity securities of small and mid-cap firms located in foreign nations. It invests in companies from mature economies as well as emerging markets. The international mutual fund returned 21.45% in the last one year period.
The international mutual fund has an expense ratio of 1.43% compared to a category average of 1.63%.
Fidelity Advisor International Capital Appreciation A (FCPAX) primarily invests in foreign equity securities and also purchases those issued from emerging markets. Investments are allocated across countries after taking into consideration their market size relative to the entire global market. The international mutual fund has a ten year annualized return of 5.68%.
As of February 2011, this international mutual fund held 158 issues, with 1.86% of its total assets invested in Royal Dutch Shell PLC B.
T. Rowe Price International Discovery (PRIDX) seeks capital appreciation over the long term. The majority of the fund’s assets are invested in stocks of foreign small and mid-cap companies. It invests in a minimum of ten countries and a hundred different companies at any given time. The international mutual fund returned 19% in the last one year period.
Justin Thomson is the fund manager and has managed this international mutual fund since 1998.
Waddell & Reed International Growth A (UNCGX) primarily invests in foreign firms that have growing market share, an advantageous competitive position and the ability to deliver long term growth. The fund focuses on investing in mature markets, but may also invest in emerging economies. The international mutual fund returned 16.87% in the last one year and has a ten year annualized return of 4.44%.
The international mutual fund has a minimum initial investment of $500 and an expense ratio of 1.52% compared to a category average of 1.51%.
Vanguard International Explorer (VINEX) seeks capital growth over the long term. The fund invests a large proportion of its assets in growth oriented small cap companies located abroad. Equity securities constitute the majority of its investments. The international mutual fund has a three year annualized return of 2.46%.
Matthew Dobbs is the fund manager and has managed this international mutual fund since 2000.
To view the Zacks Rank and past performance of all international mutual funds, then click here.