So you're a smart investor. You know that it's good to include a healthy portion of international companies in your portfolio, because we Americans don't have a monopoly on growth -- indeed, many economies are growing faster than ours and offer a way to diversify and reduce risk.
Want examples? One of our analysts, Bill Mann, points to the Chinese stock market as the world's greatest value, having risen more than 450% from 2004 to 2007. Meanwhile, Brazilian stocks returned 33% in 2006 and 41% in 2007. You're not going to see that very often in the U.S. market.
Of course, those returns are in the past, and given that both the U.S. and international markets have been swooning lately, some are wondering if the global boom is done. I think not. Falling prices represent opportunities, so when you think the carnage is pretty much over, you might want to jump in. Markets go up and down, eventually recovering from drops.
Responsible companies around the world
Many feel uncertain about investing globally because many countries don't enjoy the same labor and environmental protections you find in the U.S. If you want to invest internationally but are also concerned about the global environment and human rights, rejoice -- you don't have to choose between international investing and socially responsible investing. You can do both at once.
For instance, look at some of these global funds, which include both U.S. and international stocks:
- The Northern Global Sustainability Index (NSRIX) fund is new, and it focuses on companies in North America, Europe, and the Asia-Pacific region that are well-regarded for their environmental, social, and governmental practices. Its recent top holdings included Microsoft
(NASDAQ:MSFT), HSBC (NYSE:HBC), and Novartis (NYSE:NVS).
- The Portfolio 21 (PORTX) fund has averaged 7.7% returns over the past five years and focuses on "companies designing ecologically superior products, using renewable energy, and developing efficient production methods." Its top holdings recently included Staples
(NASDAQ:SPLS), Canon (NYSE:CAJ), and Intel (NASDAQ:INTC).
- You can even target bonds this way, perhaps via the Pax World High Yield (PAXHX) fund, which recently sported a yield around 7.4% and a five-year average annual return of 6.2%.
To learn more about socially responsible investing, check out these articles:
To learn more about international investing, take a look at our Motley Fool Global Gains newsletter. Bill Mann and his team scour the globe to find the best investments for your portfolio. You can take advantage of a complimentary free trial for 30 days.
Longtime Fool contributor Selena Maranjian owns shares of Microsoft and Novartis. Microsoft and Intel are Motley Fool Inside Value picks. Staples is a Motley Fool Stock Advisor recommendation. Try our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.
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