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Global opportunities going begging

TOO many investors are missing the opportunities offered by international managed funds, says Plan B director Craig Lubich.

Australia’s market represents about 1.5 per cent of the world’s market capitalisation.

Mr Lubich said international managed funds had been available in Australia for about a decade.

“They can be accessed for about $1,000,” he said.

Mr Lubich said Plan B normally carried a high proportion of international shares, depending on the risk profile of the investor.

“Most investors should be carrying between 30 per cent and 50 per cent of their exposure to international funds,” he said.

“It enhances the return and helps reduce the risk.”

The increased diversity offered by international funds helps reduce some risk. These funds have access to stocks not listed on the Australian Stock Exchange.

They also reduce some currency risk. The Australian dollar – despite its recent severe nosedive – has been in decline for the past 20 years.

“Having the international exposure can enhance the purchasing power of your money. The Australian currency decline has actually heightened returns,” Mr Lubich said.

Financial Planning Association chairman David Powell said it was important investors found out whether the international fund was hedged or not.

“This means finding out whether the fund uses Australian dollars or US dollars to buy,” Mr Powell said.

Mr Lubich said to the end of June, top performing international funds were returning up to 60 per cent.

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