International markets have captured a much larger share of the world’s economic growth, while wealth and consumption have become less concentrated in the United States. We anticipate this trend will continue for the foreseeable future.
Exposure to international investment opportunities is a key component of diversification. By diversifying across investment styles and the market-capitalization spectrum in these markets, investors can benefit from exposure to a broad range of opportunities—and from a more attractive balance between risk and reward.
Explore more how Oppenheimer International Diversified Fund may be a one-stop equity fund for international investing.
Follow @OppFunds for more news and commentary.
1 The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Oppenheimer International Diversified Fund was rated 3, 4 and 5 stars against the following numbers of Foreign Large Growth funds over the following time periods: 312 funds in the last three years, 260 funds in the last five years, and 182 funds in the last ten years. Morningstar Rating is for the Y share class only; other classes may have different performance characteristics. Past performance does not guarantee future results.
2 Holdings are subject to change, and are dollar weighted based on total net assets.
3 Source: Morningstar, 12/31/16. International large caps are represented by the MSCI ACWI ex-USA Index, designed to measure the equity market performance of developed and emerging markets and excludes the U.S. International small caps are represented by the MSCI AC World ex-USA Small Cap Index, a broad-based index widely used as a measure of international small-capitalization stock market performance. Emerging markets are represented by the MSCI Emerging Markets Index, a broad-based index widely used as a measure of emerging stock market performance. International large value is represented by the MSCI ACWI ex-USA Large Cap Value Index, a broad-based index capturing large-cap securities exhibiting overall value style characteristics across developed and emerging market countries. Each index is unmanaged, includes the reinvestment of dividends, and cannot be purchased directly by investors. The performance shown is for illustrative purposes only and does not predict or depict the performance of the Fund. The returns indicated above are not the Fund’s returns. Past performance does not guarantee future results. Sharpe Ratio: A risk-adjusted measure that measures reward per unit of risk. The higher the Sharpe Ratio, the better. The numerator is the difference between the portfolio’s annualized return and the annualized return of a risk-free instrument. The denominator is the portfolio’s annualized standard deviation (population). Sortino Ratio: A modification of the Sharpe Ratio that differentiates harmful volatility from general volatility by taking into account the standard deviation of negative asset returns, called downside deviation. The Sortino Ratio subtracts the risk-free rate of return from the portfolio’s return, and then divides that by the downside deviation. A large Sortino Ratio indicates there is a low probability of a large loss.
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. Investments in securities of growth companies may be volatile. Value investing involves the risk that undervalued securities may not appreciate as anticipated. 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. While the Fund may be appropriate for a portion of a retirement plan investment, it is not a complete investment program. Portfolio managers will have the authority to select and substitute certain underlying Oppenheimer funds, as designated in the prospectus, and may be subject to potential conflicts of interest because the fees paid to it by some underlying funds are higher than the fees paid by others. However, the managers are fiduciaries to each portfolio and are obligated to act in its best interests when selecting funds. Each of the funds in which the portfolios invest has its own investment risks, and those risks can affect the value of each portfolio’s share and investments. There is no guarantee that the underlying funds will achieve their investment objectives. The underlying funds may change their investment objectives or policies without the approval of the portfolio, and a portfolio may be forced to sell its shares of the underlying funds at a disadvantageous time. Diversification does not guarantee profit or protect against loss.
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.