There's plenty of money to be made investing outside the United States. Provided, of course, you know where to look . . . and what to buy.
Frank Jennings, portfolio manager of the Oppenheimer Global Growth & Income Fund since 1995, has the ability to invest his fund's assets anywhere in the world. And he's not limited to investing in only one asset class.
That means Jennings has to be pretty good at a lot of different things, including seeing what the big picture has to offer and then ferreting out the best investment ideas. "I believe the customer understands that I have a great degree of discretion [in managing the fund]," says Jennings. "I could be 10 percent in Asia or have zero percent invested in Asia. Or I can have 60 percent in the United States or 20 percent. In other words, you don't know what I'm going to do next."
Although that may be unsettling to those who want to know precisely where their fund's assets are placed, allowing a portfolio manager to do what he does best--professionally manage money--can pay off. Shareholders of the Oppenheimer Global Growth & Income Fund are likely to have few regrets indeed. Since the fund's inception in October 1990, its average annual total return has been 16.67 percent (through the end of October 1999). At press time, it was ahead nearly 59 percent for the year.
Jennings' investment style is to look for assets he considers undervalued--in the growth arena and in high-profit-margin businesses. Because his investing nature tends to be eclectic, portfolio holdings don't typically follow any particular theme. Instead, Jennings says it's kind of a "rifle shot--one idea at a time" fund.
Right now the fund holds about 63 securities, mostly from Europe and the United States. Earlier in 1999, Jennings sold down his emerging-markets positions in favor of European holdings. At press time, two of his favorite holdings were Hasbro, the U.S. toy manufacturer, and Thorntons, an English candy maker.
Hasbro caught his eye for a number of reasons. First, it's a big company that owns brand names we know, like Playschool, Kenner, Tonka and Milton Bradley. Another draw was the stock's price. It was selling at what Jennings considered an attractive price. On top of that, he saw plenty of foreign growth opportunities in the toy business as companies like Wal-Mart start opening stores worldwide. And finally, profit margins are high. Next time you buy a toy or game for your kids or for kids of friends, take a look at how much stuff is in the box, then at its price, and you'll see where Jennings is coming from.
About 13 percent of the fund's assets were invested in bonds as September came to a close. The bulk, 11 percent, were in U.S. Treasury bonds.
Although it might be hard to keep a handle on the changing complexion of the holdings within the Oppenheimer Global Growth & Income Fund's portfolio, several things about it aren't likely to change much. The fund will always be internationally diverse and provide income from dividend-paying stocks as well as bonds. And it will always be volatile. Then again, these days, what isn't?
Dian Vujovich is a nationally syndicated mutual fund columnist and author of 101 Mutual Fund FAQs (Chandler House Press). For free educational mutual fund information, visit her Web site, http://www.diansfundfreebies.com