Many investors with an America First mentality need to expand their horizons. "A lot of investors don't have enough exposure to international markets, which can cut down on volatility and improve long-term returns," said Ibbotson Associates' Peng Chen. "The U.S. is the largest stock market, but more than 50% of the global equity market is in foreign stocks." While globalization has meant foreign markets aren't the great diversifiers they once were -- increasingly, U.S. and overseas markets move in tandem -- overseas funds deserve a prominent place in the long-term investor's portfolio. How prominent? "Investors should have up to 25% in international assets, depending on the risk level of the client," says Mitchel Shapiro, certified financial planner and president of Maryland-based Shapiro Financial Services. With that in mind, this week's Five Winning Funds is devoted to suggesting five superlative foreign offerings. The funds run the gamut from deep value to fairly aggressive growth, but they all share key traits: great managers and returns that far outdistance peers over the long haul. Any of these five offerings, depending on an investor's risk level, have proven solid, foreign representatives in a diversified portfolio.
Jean-Marie Eveillard's First Eagle Overseas fund is first on our Five Funds list because it's first on just about every performance list for foreign stock funds. The fund's one, three, and five-year returns -- 7.7%, 11.29% and 10.55%, respectively -- rank in the top 1% of all overseas funds, according to Morningstar. And Eveillard is no flash in the pan. The Frenchman has been investing overseas for more than two decades, racking up impressive long-term performance. First Eagle Overseas, which he has run since the fund's 1993 inception, hunts for stocks in all corners of the globe and mainly sticks to the smaller fry; 60% of the companies in the fund are micro-cap or small-cap, and the remaining holdings are mostly mid-cap stocks.