British investors seem loath to spread their investments around – they have 60%-70% of their cash invested in the UK stockmarket. But why? The FTSE All-Share index returned a very respectable 18% last year, but the French market rose 23%, the German stockmarket 27% and the Japanese market a whopping 40%. Looking abroad might prove to be a more profitable proposition than staying home. If you want to go where the best opportunities are, “why restrict yourself to the UK market”? asks Anthony Bolton of the Fidelity Special Situations Fund.
According to Ed Bowsher on Motleyfool.com, certain sectors of the UK market may be awash with companies, but other sectors are short of large companies, especially biotech and technology. He recommends tracker funds as a simple means of gaining exposure to overseas markets. “For example, Legal & General offers several overseas trackers, while iShares sells a range of overseas exchange traded funds, which are very similar to trackers”.
In The Sunday Times, Paul Illott of Bates Investments singles out some global funds, which puts the difficult decision of how much to place in each market into the hands of a single fund manager. He suggests Investec Global Free Enterprise, Fidelity Wealthbuilder and Gartmore Global Focus.