Investing in international equity markets has emerged as a lucrative option for investors, most of whose portfolios consist entirely of domestic securities. Around half of the world’s equity market capitalization is made up by international equity markets. Emerging markets, which continue to grow at a rapid pace despite the slowdown in developed economies, are of particular interest for those looking at appreciably higher rates of return. However, such investments also carry unique risks and mutual funds provide a less risky means of exposure to this sector than stocks.
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 18.95% in the last one year period.
The international mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.89% compared to a category average of 1.62%.
Wasatch International Growth (WAIGX) invests the majority of its assets in securities issued by companies located in emerging markets. It invests in a minimum of five countries included in the MSCI AC World Ex-U.S.A. Small Cap index. The international mutual fund has a three year annualized return of 11.49%.
As of July 2011, this international mutual fund held 96 issues, with 2.41% of its total assets invested in Galaxy Entertainment Group Ltd.
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 16.2% in the last one year period.
Justin Thomson is the fund manager and has managed this international mutual fund since 1999.
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 has a ten year annualized return of 4.59%.
The international mutual fund has a minimum initial investment of $500 and an expense ratio of 1.48% compared to a category average of 1.49%.
Oppenheimer International Small Company A (OSMAX) seeks long term capital growth. The fund primarily 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 21.27% in the last one year period.
Frank Jennings is the fund manager and has managed this international mutual fund since 2011.
To view the Zacks Rank and past performance of all international mutual funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.