U.S. investors, in the main, have always hesitated from sending their money overseas -- but that's beginning to change. So say top figures at ING Funds
, who last Thursday invited several members of the media to ING's New York offices for a presentation on their two-month-old ING Diversified International Fund
, president and chief executive of Scottsdale, Arizona-based ING Funds Distributor
, introduced the company's newly appointed senior portfolio manager for international equity, Uri Landesman
. Region by region, Landesman outlined his view of present opportunities and causes for concern in various world economies, before taking questions on strategy specifics.
According to Boulware, ING Funds sees evidence that the general public is ready to make the leap on investing abroad. He cited a $150 billion positive flow of assets overseas in 2005, and Morningstar's recognition of five distinct sub-categories of international investments, as proof that U.S. investors are finally beginning to think global.
Still, he said, most have some way to go before they allocate as much to international assets as his organization believes they should. He pointed to figures (taken from the software program SimFunds
) showing that U.S. direct investors in mutual funds currently allocate only about 13%, on average, to international holdings. Institutional investors do better, with about 32% in international funds. Boulware suggested U.S. investors of all types should have at least this proportion of funds invested in international equities.
Both Boulware and Landesman emphasized that investors can only reap the benefits of international markets by buying into foreign companies. U.S. firms that operate internationally are nonetheless subject to U.S. market fluctuations, it was suggested, and therefore provide no real hedge to a U.S.-oriented portfolio.
Accordingly, with the spread provided by the Diversified International Fund, ING is encouraging investors to dig in. The company hopes to entice investors open to genuine global exposure by offering a single product with full diversification around style and cap ranges. "It's really a best-of-breed product set," said Boulware, who also pointed out that the fund is competitively priced at 162 basis points. He maintained that the tactical allocation approach ING is using for the fund will generate attractive alpha.
ING's push towards internationalism is at least partially founded on a backwards-looking evaluation of international markets over the past couple of years. Still, Boulware is confident about the company's timing, and believes now is the right moment for investors to act. Perhaps investors agree: the roughly $65 million they have already placed in the Diversified International Fund exceeds ING's targets, he said.
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