First Eagle Overseas also applies a value approach, based on the tenets on Benjamin Graham and Warren Buffett. Lately, he is finding good values in Japan, which at 21% of total assets is the fund's largest country exposure. He also remains bullish on gold prospecting -- he runs a phenomenal gold fund as well -- especially Newmont Mining ( NEM), which turns up in the Overseas fund. First Eagle is a worthy core overseas fund, but because of its small-cap bent it doesn't offer one-stop shopping for international stocks of all sizes. But Eveillard is a one-of-a-kind manager, who unearths great companies where others may not tread. With its great returns, outstanding manager and low costs (an expense ratio of 1.15%), First Eagle Overseas is a worthwhile choice. If investors don't have access to the no-load offering (ticker: SGOIX), the other share-class offerings -- one carries a front-end load (SGOVX), the other a deferred load (FESOX) -- are worthy of consideration. For more on Eveillard, please read our recent interview,
First Eagle's Eveillard Explains Why He Likes Tyco and Gold.
One of American Funds EuroPacific's strongest selling points is its consistency. It only has one year in the past decade -- 2000 -- when returns weren't in the top two-fifths of its peers. Caveat emptor: This fund's share classes carry a load, or sales charge. But investors may bypass the charge if they buy with a broker. Oh, and don't let the "American" moniker scare you away -- this firm has been investing overseas for a long time. In fact, it created the original benchmark EAFE index (now known as MSCI-EAFE -- short for Morgan Stanley Capital International-Europe, Australasia and the Far East) that is now the standard measuring stick for international performance.
The Intelligent Investor, the Sage of Omaha expounds on the virtues -- and extols the outstanding returns during the dreary 1968-1982 bear market -- of the fellow Graham & Doddsvilleans at Tweedy Browne. Global Value's three skippers -- Christopher Browne, William Browne and John Spears, all at the helm since the fund's June 1993 inception -- are purists about buying good companies of any size whose stocks are trading at a discount, and then letting them ride. The fund's annual turnover is a mere 7%, which helps keep the expense ratio at a below-average 1.37%. The strategy has paid off: The fund's three-year average annual return of negative 3.72% and five-year average annual return of 2.36% place it in the top 6% of the category, respectively. The $3.92 billion fund, unlike many other overseas funds, hedges its currency bets with the dollar, so it doesn't benefit from the recently weakening dollar. However, the managers believe the hedge makes the fund less volatile.
If great managers, an excellent long-term record and low costs aren't enough of a sell, another primary benefit of Global Value is its low correlation with the S&P 500 -- the solid diversification it affords makes it a worthy overseas fund.
here to read about the benefits of index fund investing and here for a primer on ETFs.