Start Your World-Stock Fund Search Here
These globe-trotting stock funds should be easier to stick with over the long haul.
World-stock funds certainly have their charms, including regional diversification and the potential to be a one-stop option for equity exposure. Of course, diversification doesn't protect world funds in all market environments; the typical world-stock fund lost a staggering 42% in 2008. That said, world-stock funds fared better than most other international-stock categories during that time frame, particularly those that were more heavily invested in U.S. stocks.
To start the search for strong options in this category, we first used the Premium Screener to select world-stock funds with top-third 10-year records relative to their category peers. In terms of risk, we narrowed the field down to funds that have achieved low, below-average, or average Morningstar Risk ratings. This measure assesses variations of monthly returns compared with similar funds over the three-, five- and 10-year periods, penalizing funds with more downside risk because investors are particularly sensitive to absolute losses. Compared with funds with higher risk ratings, these funds should be easier to stick with through the rough patches. Lastly, we set the screen to pull funds that are open to new investments and which also sport reasonable price tags.
To view the results as of Jan. 5, 2009, click here.
Karin Anderson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.