Gross domestic product (GDP) grew by a relatively stagnant 1.8% in 2011, ranking the United States 157th among the world’s countries. At the top of the list was Mongolia, with GDP growth of 17.5%, driven largely by a mining boom. Larger economies with strong growth rates included China (9.2%), Saudi Arabia (7.1%), and India (6.8 %.)
Of course, it might not be prudent to move a substantial portion of your assets from the United States to Mongolia, but these figures illustrate that there could be potential growth opportunities outside U.S. borders. One way to pursue these opportunities is through mutual funds that invest in foreign securities.
A Wide World of Choices
International mutual funds range from global funds that attempt to capture worldwide economic activity to regional funds and those that focus on a single country. Because foreign markets tend to perform differently than domestic markets, international funds can be a useful way to help diversify your portfolio. Diversification is a method used to help manage investment risk; it does not guarantee against investment
Emerging economies may offer greater growth potential than advanced economies because they have further to go on the path toward economic development. In fact, the International Monetary Fund (IMF) projects an average growth rate of 5.6% for emerging economies in 2013 compared with 1.5% for advanced economies, which were held back by continuing struggles in the Eurozone and Japan. However, the stocks of companies located in emerging markets could be significantly more volatile and less liquid than the stocks of companies located in more developed foreign markets.
International investing requires time and effort to understand the potential risks and benefits, but it could be worthwhile to determine whether foreign securities are appropriate for your portfolio. The return and principal value of all mutual funds fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost.
Learn more at:
Or, contact Steve Lloyd at (801) 223-7502 to set an appointment with one of our financial professionals.
Curtis Willardson, CFP, CLU, Daniel O Palmer, and Stephen Martin CFP, CLU, ChFC are registered representatives offering securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. David Palmer is a registered representative offering securities through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity. Registered address: 188 W River Park Drive, Provo, UT 84604.
Not NCUA/NCUSIF Insured – No Credit Union Guarantee – Not A Deposit – May Lose Value
Not Insured By Any Federal Government Agency.