Us Mutual Funds Migrating Overseas

US large-cap mutual fund managers lift foreign equity holdings above 8% The never-ending quest for better returns has led portfolio managers of US large-cap mutual funds to boost their exposure to non-US stocks. We analyzed $780 billion of equity holdings of 90 mutual funds in the Lipper Large-cap Core, Growth, and Value benchmark indices. Foreign stock holdings of large-cap Growth mutual funds range between 0% and 19%. US mutual fund portfolio managers buy European, but avoid Asian stocks On a combined basis stocks in Japan and Asia Ex-Japan account for less than 1% of total equity assets of the average US large-cap mutual fund. A majority of foreign holdings of US large-cap mutual funds is in Europe and North America (Ex-US, Bermuda, Cayman Islands). Foreign stocks enhanced returns in 2005 but not in 2006 A positive correlation existed in 2005 between US large-cap core mutual fund returns and the percentage of foreign equity investments in a portfolio. This correlation broke down in 2006. Invest in 30 stocks with the largest upside to Goldman Sachs Price Targets We identify 10 stocks in each region with upside return to our target prices averaging 30.

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