Cautious investors should consider MFS International Diversification ( MDIX), which has finished in the top half of the foreign large blend category for seven consecutive years. The fund ranks as one of the most diversified portfolios available.

Portfolio manager Thomas Melendez puts his assets into five different MFS funds, investing 10% into MFS Emerging Markets Equity ( MEMAX), 10% in MFS International New Discovery (MIDAX), a small-cap fund, 30% in MFS Research International ( MRSAX), a large blend fund, 25% in MFS International Value ( MGIAX) and 25% in MFS International Growth ( MGRAX).

Melendez says that many investors fail to diversify their international holdings properly, overlooking small caps or other sectors. But MFS International Diversification provides a comprehensive menu, insuring that shareholders can prosper in many market environments. "If value stocks fall out of favor, you can still do well because you have some assets in growth," he says.

To hold growth stocks, consider Buffalo International ( BUFIX). During the past five years, the fund lost 0.8% annually, surpassing 91% of competitors in the foreign large growth category.

Portfolio manager Bill Kornitzer looks for companies that can grow consistently for the next three to five years. Once he buys, he holds for long periods. The fund only turns over 29% of its portfolio annually, half the rate of the average peer.

A holding is Henkel ( HENOY), a German maker of laundry detergents and skin care products. Operating worldwide, Henkel produces such brands as Dial soap and Purex detergent. "This company will never grow 20% a year, but the topline will grow consistently and the margins can increase," says Kornitzer.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Stan Luxenberg is a freelance writer specializing in mutual funds and investing. He was executive editor of Individual Investor magazine.

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Intermediate Trade: Germany ETF