How to include international stocks in your portfolio

At the Money Reporter, we take a portfolio approach to your investments, covering all asset classes: cash, fixed-income securities, income trusts and Canadian, U.S. and international equities. Sometimes a mutual fund is the best way to include foreign stocks in your portfolio.

We rely on mutual funds occasionally, especially to cover off your U.S. and international equities exposure. In our view, the complexities of currencies, foreign accounting systems and disclosure standards, which can greatly complicate the fundamental analysis of foreign securities, make it well worth paying a reasonable management expense ratio to have someone else do it for you.

Despite political uncertainty, the European economy is expected to continue its slow but steady recovery in 2017. Meanwhile, European stocks are more attractively valued than those in the U.S. That’s as good a reminder as any that you might want to beef up your international stocks—especially if you don’t have any at all. One way to do that is to simply buy some units in Mawer International Equity Fund. Here are some of the key details of this fund.

Mawer International Equity Fund (Class A fund code: MAW102(NL)) has a track record dating back to November 1987. It’s been managed by David Ragan since November 2007, and assisted by Peter Lampert since September 2015, on behalf of Mawer Investment Management Ltd. of Calgary.

 Diversify your portfolio with international stocks

The objective of this fund is to achieve above-average, long-term, risk-adjusted returns and to provide diversification of risk by investing primarily in entities outside Canada and the U.S.

The strategy the fund follows is to systematically create a broadly diversified portfolio of wealth-creating companies with excellent management teams bought at discounts to their intrinsic value.

The fund’s asset allocation, therefore, is influenced by relative valuations and the need for adequate diversification, rather than by simply allocating a set amount to each country or region.

In terms of nuts and bolts, this is a no-load fund, it’s RRSP eligible, and it has a low management expense ratio—great for an actively managed international mutual fund—of 1.52 per cent.

Mawer International Equity has $4.9 billion in assets under administration. The geographic breakdown of this money includes: the U.K, 20.0 per cent; Japan, 11.9 per cent; and Switzerland, 7.9 per cent.

Major holdings include Aon plc, Intertec Group plc and Air Liquide SA.

If you need to beef up the international stocks in your portfolio, this fund is a great candidate.

 

This is an edited version of an article that was originally published for subscribers in the February 3, 2017, issue of Money Reporter. You can profit from the award-winning advice subscribers receive regularly in Money Reporter.

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