Diversification
International share funds - diversifying overseas
Many share investors hold a portfolio of just New Zealand shares.
However, in world terms the New Zealand market is small, comprising less than 1% of the global market. This means that more than 99% of the opportunities in share investment are overseas!
Managed investments that invest in overseas shares present individual investors with the following opportunities:
- greater
diversification by spreading your share investment not only across
different industries and sectors, but across different countries
as well
- the ability
to invest in some of the world's best-known companies, many of
which can only be bought overseas (eg Nestlé, Microsoft, Canon
and McDonald's to name a few)
- access to developing economies, which present higher growth potential than most developed countries.
It can be quite difficult for individual investors to purchase overseas shares directly. It is much easier to invest overseas via a managed investment. A managed investment also takes away the onus of monitoring world markets, currency movements and endless research reports - it's the fund managers' job to do that for you. Not only will your fund manager continue to look for new investment opportunities, they will actively monitor developments in currency markets and make adjustments to minimise risk.