With signs increasingly pointing to a further slowing of the U.S. economy, TheStreet.com Ratings encourages investors to take a thorough look at global opportunities for growth.
Indeed, our models have shown that over the past three years, foreign-focused mutual funds have outperformed their domestic counterparts, and this trend shows no signs of a letup.
With this in mind, where should an investor look for global growth?
It does not appear that the recent turmoil in the emerging market of Thailand will affect that region in any manner similar to the havoc wrought by the Asian crisis of 1997. However, perception is often everything in the volatile emerging-market arena, and investors may want to avoid Asia until the Thai political situation stabilizes.
An Isle of GrowthWhich brings me to Ireland. By investing in the country's stable yet rapidly growing economy, you can capture returns more commonly associated with emerging markets and avoid the political and economic instability that often plagues developing regions. The vehicle to use is the (IRL - Get Report) New Ireland Fund , a closed-end fund that trades at a modest discount of 5% to its net asset value of $30.23. TheStreet.com Ratings gives it an A rating, and it ranks in the top 30 of the approximately 900 closed-end funds, including exchange-traded funds, that we rate. New Ireland's objective is long-term capital appreciation through investing in equity securities of Irish companies. The fund's average turnover during the past 10 years is a very low 15%, which suggests that it changes its entire portfolio every six and a half years. This is definitely a fund for the buy-and-hold investor who can tolerate the risks -- and wants to reap the benefits -- often associated with global investing. As the following charts illustrate, the fund has a concentrated portfolio, with only 23 holdings and a 52% stake in building and construction and finance.
|A Bet on Growth|
|Construction & Building||32%|
|Food & Beverage||14|
|Health Care Services||7|
|Diversified Financial Services||5|
|Publishing & News||4|
|Food & Agriculture||3|
|Holdings (Net Assets: $141.65 million)||Percentage|
|Allied Irish Banks PLC||16.73%|
|KingSpan Group PLC||8.63|
|Kerry Group PLC - A||7.03|
|Grafton Group PLC-UTS||5.02|
|Irish Life & Permanent PLC||4.64|
|FBD Holdings PLC||4.25|
|IAWS Group PLC||3.91|
|Independent News and Media PLC||3.64|
|Icon PLC - Sponsored ADR||3.59|
|United Drug PLC||3.37|
|McInerney Holdings PLC||2.2|
|RPS Group PLC||1.77|
|Irish Estates PLC||1.58|
|Norkom Group LTD||1.1|
|Horizon Technology Group PLC||1.09|
|Greencore Group PLC||1.04|
|IONA Technologies PLC||0.53|
|Blackrock International Land PLC||0.08|
|Irish Eyes Are Smilin'|
| Time Period
as of 9/18/06
| Irish Stock Exchange
Equity Overall Index - ISEQ