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These Mutual Funds Choose Countries So You Don’t Have To

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When it comes to stocks, it’s been difficult lately to decide whether to focus more on the US or gravitate toward foreign companies. The US bull market has looked shaky, and as of mid-December, the Standard & Poor’s Index of 500 US stocks was disappointingly flat for 2018. But foreign stocks were faring much worse, down 15%, on average.

So should you bet on the fact that the US economy is stronger than most foreign economies and US stocks more stable…or figure that foreign stocks are undervalued and likely to do better?

If you don’t feel very qualified to make that call, you’re hardly alone. That’s why there are hundreds of flexible global mutual funds to choose from—funds that shift their bets between US and foreign stocks based on where the managers see opportunities. But which fund to choose? Here are two attractive ones…

Vanguard Global (VHGEX) divides its assets among three investment adviser firms, each using a different strategy to find fast-growing companies. The resulting 1,400-stock portfolio has outperformed its benchmark, the MSCI All Country World Index (MSCI ACWI), over the past decade. It recently held 49% of assets in US stocks and 46% in foreign stocks. Top holdings include Amazon.com and South African media giant Naspers. 10-year annualized return: 11.4% versus 8% for the MSCI ACWI.* Vanguard.com

Artisan Global Value (ARTGX), which has a long-tenured manager with a successful track record, holds about 50 large-cap stocks. It has outperformed its benchmark index over the past decade with 15% less volatility and recently held 46% of assets in foreign stocks and 45% in US stocks. Top holdings include Oracle in the US and South Korea’s Samsung Electronics. 10-year annualized return: 12%. ArtisanPartners.com

*Returns are through December 15, 2018.

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Source: Kevin McDevitt, CFA, senior research analyst at Morningstar Inc., Chicago, which tracks 620,000 investment offerings. Morningstar.com Date: January 15, 2019 Publication: Bottom Line Personal
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