International Intrigue

Although downtrodden, foreign funds could be your passport to higher returns in 2002

between the fund’s performance and the benchmark index. Foreign stock funds rely more on economic developments outside of the United States.

To make sure that our list wouldn’t lean too heavily on the U.S. market, we scratched off funds with an r-squared of 50 or higher. In the end, we found a group of seaworthy picks that could help you add a bit of international flavor to your portfolio.

You’ll note that our list includes a number of funds that invest in small- and midcap stocks. Those two segments of the global stock market include a large number of companies that don’t make it to the S&P 500 roster and firms whose results probably won’t track the U.S. economy very closely. Oakmark, a Chicago-based money management firm, manages the top two funds on our list. The Oakmark International Small Cap I fund’s (OAKEX) results have been volatile over the years–the fund slumped 8.9% in 2000. Still, the Morningstar rating for its cousin, the Oakmark International fund (OAKIX), is four stars. Third place went to an interesting fund: the Tweedy, Browne Global Value fund (TBGVX). To best protect returns, the managers at Tweedy Browne invest by hedging contracts to make sure that fluctuations in the U.S. dollar don’t bruise gains made in stock markets overseas.

 Top Performing Foreign Stock Funds
(Ranked by 3-year Total Return)

Fund Name (Ticker)

1-Year
Total
Return*

3-Year
Total
Return*

5-Year
Total
Return*

Toll-Free
Number

Minimum
Initial
Investment

Stock Funds          
Oakmark Intl Small Cap I (OAKEX)

4.37

16.99

7.31

800-625-6275

$1,000

Oakmark Intl I ( OAKIX)

4.41

12.03

10.14

800-625-6275

1,000

Tweedy, Browne Global Value (TBGVX)

4.27

10.97

15.96

800-432-4789

2,500

First Eagle SoGen Overseas A (SGOVX)

4.70

9.53

9.73

800-334-2143

1,000

Delaware Intl Sm Cap Val A (DABAX)

-2.89

4.65

N/A

800-523-4640

1,000

As of July 31, 2001
Source: Morningstar Inc.
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