Funds Benefit From Global Approach

by Philip Morton, Investors Offshore.com

16 August 2001

Although globalisation has been in the news a great deal recently for altogether different reasons, according to many experts, mutual funds with a global perspective may be the way to go in these uncertain times.

Jeffrey Morrison, lead manager of the $151 billion Bissett Multinational Growth Fund certainly thinks so. 'The main benefit is on the risk management side,' he explained. 'By focusing on multinationals, you're not tying yourself to one economy.'

The mandate of the Bisset Multinational Fund and others like it is to invest in companies that are traded in North America, but generate significant revenue, or have large operations outside their home countries. The Japanese based automobile manufacturer, Honda, has been cited as an example of such a company- although the Japanese economy has long been perilously unstable, Honda on a global basis has performed quite well, cushioned as it is by its business activities in the European and US markets. 'Its global exposure really shields it from what is going on in the domestic market,' observed Mr Morrison, adding that as a general rule, fund managers such as himself usually focus on multinational companies where at least 30% of revenue or profits comes from outside their home country.

As the US economy teeters on the brink of recession, uncertainty over which countries will follow it over the cliff edge has meant that fund managers such as Jeffrey Morrison are taking no chances, and are holding more stocks than they would in order to cushion the possible blow for investors in a way that more country specific funds simply could not. 'With the environment we're in, we're not getting any strong convictions in any one area,' explained Mr Morrison. 'Broadening ourselves out a little bit more in this time of uncertainty limits our risk.'

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