While the United States represents the largest single contributor to global GDP, 75% of the world’s GDP is taking place across our borders in other countries. That means that from an investing standpoint, an international equity strategy can help diversify your portfolio and take advantage of the many investment opportunities available outside of the U.S.
Though we have seen that historically there have been market cycles where international equities outperform U.S. equities, there can be a tendency for many American investors to have a home bias that favors domestic investment and largely ignores non-U.S. opportunities.
A note on home bias: Many American investors experience what is known as home bias. Home bias is the “tendency for investors to invest in a lot of domestic equities, despite the purported benefits of diversifying into foreign equities.”
Helping You Discover Select International Equity Strategies
Since there is a myriad of money manager strategies that incorporate global and international investment opportunities, but not every money manager is a good fit for every investor, we have compiled a short list of our top international equity money manager picks.
We’ve compiled this list to help you discover and evaluate new and different money manager strategies. These investment strategies encompass a wide range of international and global asset classes and investment disciplines.
This quarter, the WrapManager Investment Policy Committee has chosen to highlight strategies designed and managed by:
- Cambiar Investors
- Dorsey Wright
- Federated Investors
- Newfound Research
- Polen Capital
A Little About the Featured Strategies
The strategy selected from Cambiar Investors is all about identifying opportunities. As a firm Cambiar believes that stocks incur dislocations where a stock may trade at a discounted valuation relative to its earning power. Their portfolio management team seeks out these stocks and seeks to identify events that will cause investors to reward a company with higher valuations.
The strategy selected from Dorsey Wright is simple in concept and powerful in application. It compares the performance of a stock to the performance of the overall universe and is incredibly flexible in its execution.
The strategy selected from Federated Investors seeks dividend growth that complements dividend yield. In general, their portfolio management team seeks to invest in companies that have both the ability and willingness to pay and increase their dividend over time.
The strategy selected from Newfound Research has the flexibility to move in and out of the markets and is 100% rule-based. This removes cognitive biases and emotional decisions while taking a long-term stance in the market.
Lastly, the strategy selected from Polen Capital is what’s known as a low-turnover, best ideas portfolio. This means that their portfolio management team applies the same investment philosophy across regions, industries and market cycles while aiming to invest in the best businesses they can find.
Get Your Copy of WrapManager’s Q4 2017 Top International Equity Money Manager Picks Report Now
To help you learn more about these money managers and their international investment strategies, we’ve put together a 13-page introductory guide that includes a brief description and overview of the strategy. This quarter there is also additional information about international and global investing as a potential way to create more portfolio diversification.
 JP Morgan Guide to the Markets 4Q 2017, pgs. 41 & 52 - 53
International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging-markets securities can be significantly more volatile than the prices of securities in developed countries and currency risk and political risks are accentuated in emerging markets.
Strategy descriptions listed represent a brief outline of the portfolio’s objective. There is no guarantee that any manager or product will be successful in achieving the objective described. These managers do not represent a complete list of all investment categories or managers available or that WrapManager recommends to clients. The strategies used by the money managers listed are not suitable for all investors. This material is being provided for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation. For complete information on these or other manager strategies, please contact us at 1-800-541-7774 or contact us here.