Globalization continues to break down geographic barriers and is bringing economies closer than ever before. It’s also opening doors to a growing array of opportunities for investors around the world.
Today, many companies are multinational with consumers all over the globe, and a significant portion of their revenues coming from beyond their home country. Continually improving technology has paved the way for seamless communication between businesses, their partners, suppliers and customers, no matter where they’re located.
In turn, this has enabled companies to sell products in distant markets with the same ease and speed as in their home country.
Individual participation in globalization is growing as a result, thanks to social media and other Internet-based platforms.
Global GDP has surged from $1.3 trillion in the 1960s to over $70 trillion today, with the U.S. making up a smaller portion of the world’s economic activity. As the U.S. continues to become a smaller share of global GDP, taking a global approach to investing will become even more important.
Global Investing: The Benefits of Active Management
In our view, to gain the optimal amount of exposure around the world, investors should seek active managers who know where to invest and can position portfolios for long-term capital appreciation. Rather than mirroring a benchmark, active managers can provide investors with an opportunity to selectively own industries and companies in inefficient markets.
We believe this approach can add significant alpha to a portfolio while limiting the downside.
The Oppenheimer Global Equity Team has been a prominent global investor since 1969, with a focus on finding quality companies with strong management, sustainable competitive advantages and enduring growth prospects. The team continues to serve long-term investors by finding fresh ideas, conducting deep due diligence and establishing positions that hold great promise for the future.
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These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.
Special Risks Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. Emerging and developing market investments may be especially volatile. Eurozone investments may be subject to volatility and liquidity issues. Investments in securities of growth companies may be volatile. Mid-sized company stock is typically more volatile than that of larger company stock. It may take a substantial period of time to realize a gain on an investment in a mid-sized company, if any gain is realized at all. Diversification does not guarantee profit or protect against loss.