Global Funds May Not Be Smart Way to Invest Globally
JARFX has 55% exposure to the U.S., 10% to the U.K., 10% to developed Europe and 6% to Japan.
For the last two years ACWI has been up 7.70%, vs. 15.4% for JARFIX, 4.4% for OPPAX and 1.4% for TEDIX. Year to date ACWI, OPPAX and TEDIX are all down close to 2% while JARFIX is up 1%.
Now I don't know whether these funds are closet indexers, but the weightings to developed Europe appear to be very large and likely to continue to be a drag on returns.
These funds do not have to own that much developed Europe but they chose to. This seems similar to many funds being far too heavy in tech stocks in 2000 or financial stocks in 2008.Some investors will be better off with these funds, but someone interested in a more hands-on approach might want to use narrow products like country funds to proactively include some countries in their portfolios and exclude others. At the time of publication, Nusbaum had no positions in securities mentioned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV