These days, a company’s location is much less relevant than where it sells its goods and services. Instead of focusing on the best stocks in each country, we look for the best stocks regardless of country. That helps lead us to the best 50 or 60 investment ideas throughout the globe—investments we believe should form the core of a well-diversified portfolio.
Global equities offer far more geographic diversification and potential risk mitigation. Confining a portfolio to U.S.-based companies may cause investors to miss out on many of the world’s great opportunities.
Analyzing global structural, economic and demographic trends gives us key insights into what’s going on in the world and what industries are most likely to benefit. From there, we use fundamental research to identify the most promising companies in each industry.
This approach to global value investing allows us to move beyond rigid style boxes. We focus on absolute value, not relative value. We believe the value of a company should be based on its own unique cash-oriented metrics, not on how those metrics compare to other companies.
Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks. Emerging and developing market investments may be especially volatile. Due to the recent global economic crisis that caused financial difficulties for many European Union countries, Eurozone investments may be subject to volatility and liquidity issues. Value investing involves the risk that undervalued securities may not appreciate as anticipated. Small and mid-sized company stock is typically more volatile than that of larger, more established businesses, as these stocks tend to be more sensitive to changes in earnings expectations. It may take a substantial period of time to realize a gain on an investment in a small or mid-sized company, if any gain is realized at all. Diversification does not guarantee profit or protect against loss.
These views represent the opinions of OppenheimerFunds and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the open of business on the publication date, and are subject to change based on subsequent developments.