A good year to go international

If you missed investing in international funds in 1999, you are late. Global issues roared back last year, posting solid returns.

But guess what? Time is still on your side. Barring the unexpected, 2000 is looking as good, and possibly even better than 1999, experts say.

All foreign and global mutual-fund categories ended 1999 "on a high note," according to Wiesenberger, a global information firm.

One category especially stood out: The emerging-markets sector soared in 1999, posting a return of 68 percent, compared to 27 percent in 1998.

Undergirding what promises to be a strong 2000 for international and foreign issues is hefty, global economic growth, says David Cooley, senior portfolio manager of the Armada International Equity Fund, based in Cleveland.

Mr. Cooley, who has assets of over $800 million under his management, sees world economic growth in the 4 percent range this year.

Europe, which finally took off during the fourth quarter, should continue to post improvements in 2000, he says, in part spurred by an active merger market and gains in telecommunications, as global firms such as Nokia (Finland) and Ericsson (Sweden), expand market share.

Japan and Asia should also score high for equities, despite continuing turbulence in Japan, he says. And Latin America will be "back on track" in 2000, Cooley reckons.

Cooley expects China to post economic growth of between 5 percent and 10 percent as that nation continues to reform many of its antiquated state enterprises.

But the one area that remains in question is Russia, he says. Still, Russian markets have shown some new spunk following the resignation of President Boris Yeltsin at the end of 1999.

Cooley is far from alone in anticipating global gains this year. Financial firm Salomon Smith Barney, for example, believes that global growth will result in only modest inflation and interest-rate hikes. That, of course, could prove to be a generally bullish combination for world-equities bourses. Nor is the telecom sector alone in driving overseas growth. Many experts believe that media and selected banking firms will also rocket upward in 2000.

One final twist: Because of the expected gains globally, some US domestic stock-fund managers are themselves looking international for companies to add to their portfolios. "I like [US] companies like Coca-Cola which derive a substantial part of their earnings from overseas," says Marion Schultheis, a managing director of mutual-fund firm J.&W. Seligman.

(c) Copyright 2000. The Christian Science Publishing Society

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