The Case for Global Investing

Don't Put All Your Eggs in One Basket

The turbulence in the U.S. equity markets over the last several years underscores the importance of not investing in just one country or region. Global diversification across stock and bond markets may help investors capture new growth opportunities, while spreading their risk and reducing overall portfolio volatility.

More Growth Potential

By increasing exposure to developed and emerging equity markets, investors have the potential to be rewarded with higher returns. For example, compare the returns of the top 3 performing global stock markets with U.S. equities over the last 3 years.

 

Top Global Markets Have Outperformed U.S. Equities in Recent Years

Annual Returns for Global Stock Markets, 2009-2011

2011 flag flag  
  Ireland 11% Indonesia 4% New Zealand 1% USA 0%  
2010 flag flag flag flag  
  Thailand 51% Peru 49% Chile 42% USA 13%  
2009 flag flag flag flag  
  Brazil 121% Indonesia 121% India 101% USA 24%  

Source: MSCI Developed and Emerging Markets Indices. Past performance is not a guarantee of future results. Investing internationally involves special resks, such as currency fluctuations, and economic and political instability. Indices are unmanaged and not available for direct investment.

 

Potential for Less Volatility

Adding an international component to a domestic stock and bond portfolio may help you manage risk while enhancing overall portfolio return. For example, over the 10-year period ended 12/31/11, a global portfolio with 20% in international stocks generated more return while maintaining the same amount of risk.

 

Consider Investing in Global Funds

One way to gain exposure to global markets is through funds that diversify assets strategically among many different countries, such as AIG's international funds. 

AIG also offers the AIG Global Trends Fund, a unique fund that seeks capital appreciation and to reduce volatility by moving in and out of 10 global asset classes. Learn more about adding this innovative global allocation fund to your portfolio.

Diversification does not guarantee a profit nor does it protect against loss.