International Investment Groups: Outperforming US Markets?

The performance of international investment group can be as good as, or better, than the performance of investment groups based in the United States. The performance of these groups can be worse than the performance of domestic investment groups. The performance of any investment group depends more on the experience and ability of the group’s investment team than where the investment group is located.

Measuring Investment Performance
One standard measure of investment performance is the Standard & Poor’s 500 Index, which measures the performance of 500 companies and their stock. There are other measurements that indicate the performance of certain investments over time. Ibbotson and Associates has tracked the performance of cash, bonds and stock over the last 70 years and have shown the following performance for each type:

• Inflation (cash), 3 percent
• Bonds, 5 – 6 percent
• Stock, 12 – 17 percent

What all this has to do with international investment groups is that these benchmarks create a way for investors to judge the relative performance of U.S. based and international investment groups. How well these groups do should be in keeping with the minimum average returns of the cash, bonds and stock.

International Investment Group Activity
International investment groups engage in the same type of market activity as other investment groups in order to produce returns for their clients. They rely on the same data about different companies and investment products that they select for their accounts and manage on their client’s behalf. This allows us to judge their performance using the same standards that are applied to U.S. investment groups.

International investment groups that are well managed and take a diversified investment approach tend to do better than those that simply follow investment trends. All investment groups look at long-term prospects for investing and make adjustments accordingly to reflect changes in the market or to take advantage of opportunities that may produce profits. This approach is taken by investment groups located in Brussels, London, Tokyo and other financial capitals throughout the world.

Similarities Between International-U.S. Investment Groups
Investment managers who have worked for U.S. investment groups lead many international investment groups. Others have been educated at schools such as the University of Pennsylvania Wharton School of Business and have the same training as U.S. investment managers. This shows a similarity in investment style and attitudes toward investment performance.

Sites like Yahoo! finance and the Wall Street Journal provide detailed information on different investment groups and a way to track the performance of international investment groups. The performance data changes constantly so it would not be prudent to mention by name the best performers and what their performance has been relative to U.S. investment groups. When looking at investment performance data, keep in mind that performance is only one measure of the success of an investment group. In order to better judge an international investment group, look at its consistent returns over a period of time, typically 3, 5 and 10 years.