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Investors urged to look overseas for returns

Investors urged to look overseas for returns

Category: Investments

Updated: 15/09/2010
First Published: 15/09/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Investors who have been put off investing internationally by the global financial crisis have been told they could be putting their portfolios at risk.

NFU Mutual has warned UK-only investors who put all their faith in the FTSE 100 that they are missing out on the long term growth and risk reducing benefits that having a diversified investment portfolio can bring.

With the top ten firms in the FTSE 100 accounting for more than 46% of the index, a poor performance from just one large blue chip firm can have a significant impact on investors who have put all their eggs into one UK-focused basket.

For instance, of the 496 point drop in the FTSE 100 over the first half of the year, over 200 of the points lost were as a result of BP and its misfortunes in the Gulf of Mexico.

Investors have also been told that by not broadening their investment horizons further afield, they could be missing out on some great investment opportunities.

While the International Monetary Fund predicts advanced economies will grow by 2.25% in 2010 and by 2.5% in 2011, emerging and developing economies, such as Brazil, Russia, India and China, are projected to increase by 6.25% during this time.

"While it is not always possible to predict how events or regulatory changes might impact the stock market or your investments, it is possible to balance your portfolio to help protect your personal wealth regardless," explains Matthew Bennett, international fund manager at NFU Mutual.

"With emerging and developing economies predicted to outgrow advanced economies by 4% over the next few years, now could be the right time for investors to think about expanding their international investment horizons."

If you're interested in investments and want to learn more about how to make the most of your money, we have teamed up with Skipton Financial Services to give you access to their investment guide.

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