3 Approaches to Global Investing

What's the best way to capitalize on global trends?

You probably recognize that the U.S. isn’t the only place to invest, but you aren’t sure how to put foreign funds to work in your portfolio.

When it comes to global investing, you have three choices:

1. Avoid foreign investments altogether

You could invest only in the U.S., but most investors know that foreign markets can present a tremendous opportunity. From 2003 through 2007, the developed market MSCI EAFE index strongly outpaced the domestic S&P 500 index. When foreign markets are in favor, investing only domestically could limit your returns.

2. Stay invested in foreign at all times

You could always keep part of your portfolio invested in foreign funds. This way, you’ll own foreign in years like 2003-2007 when overseas markets were the place to be, but you’ll also be stuck with foreign funds when these funds are out of favor, which can be a drag on your overall performance. For the past eight years, U.S. markets have outpaced many foreign markets.

3. Adjust your foreign allocation over time to capitalize on market trends

Foreign investing doesn’t have to be all or nothing. Our Upgrading approach has a proven track record of helping you invest internationally during sustained foreign trends and domestically when U.S. markets are bringing in stronger returns.

Upgrading has helped investors capitalize on global market trends for decades, and we implement this approach for shareholders of the Upgrader Funds. All of the Upgrader Funds can invest globally, and as foreign markets have done well in 2017, we’ve increased our exposure to foreign and global funds. See how each Upgrader Fund is invested by selecting a fund under the 'Mutual Funds' tab.

Stock Markets Around the World

A year ago, most foreign markets had losses, and the U.S. looked like the best place to invest. But markets changed, and a year later, many foreign markets had caught up with the U.S., and some regions, like Europe and Asia, had pulled ahead.

These changes can make it challenging for investors to determine when to invest in foreign markets and when to focus on the U.S., but a solid investment strategy can help you align your portfolios with the current trend.

Major market trends historically last years. Foreign markets were in favor from 2003 through 2007. During this five-year window, the developed market MSCI EAFE index gained 165.74%, while the domestic S&P 500 was up 82.86%. From 2009 through 2016, however, U.S. markets were in favor, and the S&P 500 gained 194.48% more than twice the return of the EAFE, up 71.19%.


The U.S. is measured by the S&P 500 Index, which is a broad based unmanaged index of 500 stocks that is widely recognized as representative of the equity market in general. All foreign indexes are shown in U.S. dollars. The S&P Europe 350 index consists of 350 leading blue-chip companies drawn from 16 developed European markets. The MSCI All Country Asia ex Japan Index represents large and mid cap companies in two developed market countries (excluding Japan) and eight emerging markets countries in Asia. The MSCI Mexico Capped Index measures the performance of the large and mid cap segments of the Mexican market; it caps the weight of the largest companies to help ensure diversification. The MSCI Brazil Index measures the performance of the large and mid cap segments of the Brazilian market. The MSCI South Africa Index consists of large and mid cap South African companies. The MSCI Australia Index includes large and mid cap Australian stocks. The MSCI EAFE Index (Morgan Stanley Capital International, Europe, AustralAsia and Far East) is an unmanaged index of over 1000 foreign common stock prices including the reinvestment of dividends. You cannot invest in an index. Past performance does not guarantee future results.

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