Investing For Beginners – Free Investment Articles and Tutorials

A few years ago, international investing was relatively new to the average, individual investor. But the two words “Emerging Markets” quickly became the buzzwords on Wall Street. Anybody who was anybody was telling you to invest overseas. More recently, though, we have heard only negatives about the international markets. There were problems in Japan, Mexico and much of South America, as well as economic disasters in Russia, Brazil and Hong Kong.


With all of this going on overseas and our markets doing so well, why take the risk of investing overseas? Well, first of all, it does not seem possible that our markets will continue to grow as it has in the past few years. As our growth slows, investors will begin to look for better opportunities, many of which exist overseas. Getting into many international markets now is like getting into the U.S. markets 20 years ago. There is a tremendous amount of growth potential. Trends such as privatization, free trade and tax reform that have fueled our economy’s growth in the past are still in their infancy overseas in less developed nations. These trends are just starting to shape the international markets. Some examples of important industries that will fuel international growth are electronics, manufacturing, automobiles and technologies, such as telecommunications, computers and the internet.

One thing you must consider, though, is that international investing is very different from domestic investing. New risk concerns arise related to currency, political stability and transaction settlement. Also, each country and market has its own rules and characteristics which can vary greatly from the U.S. in the areas of taxation, accounting, information and efficiency. A good fund manager will take care of these things for you.

The spotlight is going to focus on one of these managers, Helen Young Hayes, of the $16 billion Janus Worldwide Fund. Hayes was Morningstar’s 1997 International Fund Manager of the Year. She graduated from Yale and is a Chartered Financial Analyst (CFA). Hayes is a bottom-up stockpicker, which is rather unorthodox in the international arena. Most managers tend to focus on larger trends and will invest in only a few specific countries. This can lead to serious trouble if one of those few markets takes a dive. Remember Hong Kong? But a bottom-up stockpicker tends to be more diversified and can avoid these risks by choosing only the truly outstanding investments from a large variety of markets.

This fund invests domestically as well as internationally, but a majority of the fund is invested in foreign securities. 58% of the funds assets are invested in Europe, 31% in the U.S., and 6% in the Pacific Rim. Since the fund’s inception in 1991, Hayes has returned 20.72%. Last year, amidst all of the international trouble, Hayes managed a return of 25.8%. As for benchmarks, the fund has outperformed the Morgan Stanley Capital International Index (MSCI) by more than 12% in the last 5 years.

The fund’s top ten holdings that make up 29.36% of the fund as of 1/31/99 are: Cisco Systems (5.13%), Microsoft Corp. (3.63%), Mannesmann A.G. (3.22%), Tyco (3/19%), Tele-Communications (2.67%), Vivendi (2.58%), Time Warner (2.53%), Nokia Oyj – Class A (2.44%), Nokia Oyj – ADR (2.09%), MCI WorldCom (1.87%).

The fund has a minimum initial investment of $2,500 for personal accounts and a minimum of $500 for IRA investments. It is a no-load fund with a total expense ratio of .89% and has no 12b1 fees. You can contact Janus at 1-800-525-3713 for a prospectus and other investment information.

Related posts:

1. Investing Abroad: Risks and Rewards
2. International Capital Markets
3. Foreign Stocks
4. Standard Life amends five funds
5. What is Risk?
6. The New Growth Fund
7. Offshore investment
8. The key drivers of global funds to diversify investment risk
9. Funds ‘spicy’ of international fund managers
10. Hedge fund