Proceed with caution

The recent proliferation of country specific funds available to Australian retail investors come with additional risks and should only be used as part of a broadly diversified portfolio, according to a new Zenith Investment Partners report.

The 2007 International Shares Sector Review found that, if used wisely, these funds have the potential to enhance portfolio returns by capitalising on the above average economic growth in countries such as China and India.

However, Zenith senior investment analyst Glen Franklin cautioned it was critical that investors understood the risks inherent in such investments.

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“When you invest in a single economy you haven’t got that diversity … and you’re also investing in a much more volatile economy,” he said.

The international shares review resulted in the boutique investment researcher placing 29 products on its recommended list from an initial universe of 150 funds.

These funds have been categorised under the following four sub-headings.

Global (hedged) funds

GVI Global Industrial Share Fund — Recommended

Schroder Global Active Value Fund — Recommended (new addition)

Global (unhedged) funds

BT Wholesale International Share Fund — Highly Recommended

Acadian Wholesale Global Equity — Recommended

Morgan Stanley Global Franchise Fund — Highly Recommended

Perpetual Wholesale International Fund — Recommended

Platinum Unhedged Fund — Recommended (new addition)

Walter Scott Global Equity Fund — Recommended

Zurich Investments International Share Fund — Recommended

Regional funds

Aberdeen Asian Opportunities Fund — Recommended

AFM Davis Value Trust — Highly Recommended

Fidelity India Fund — Recommended

K2 Asian Absolute Return Fund — Recommended

MQ Asia Long Short Fund — Recommended

Platinum Asia Fund — Recommended

Platinum European Fund — Recommended

Platinum Japan Fund — Recommended

Premium China Fund — Highly Recommended

Schroder Global Emerging Markets Fund — Recommended

Specialist funds

Acadian Wholesale Global Equity Long Short — Recommended (new addition)

Acadian Wholesale Geared Global Equity — Recommended (new addition)

ColonialFirstState Global Resources Long Short Fund — Recommended

Colonial First State Global Resources Fund — Highly Recommended

HFA International Shares Fund HW — Recommended

Macquarie Global Private Equity Securities Fund — Recommended

Platinum International Brands Fund — Recommended

Platinum International Fund — Highly Recommended

PM Capital Absolute Performance Fund — Highly Recommended

Select Gold Fund — Recommended

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