Profit from a global perspective

Dodge & Cox recently filed plans with the Securities and Exchange Commission for the new Dodge & Cox Global Stock Fund, which will invest in stocks across the globe and have at least 40 percent of assets in non-U.S. equities. This is noteworthy because it represents only the fifth fund in the venerable firm's 78-year history.

Dodge & Cox is not alone in moving in the global direction. Firms such as Artisan, Calamos and Marsico have launched global equity offerings within the past year. In fact, 17 of the 159 distinct funds (excluding multiple share classes) that reside in Morningstar's world stock category were incepted since the start of 2007 and 48 have not yet reached their three-year anniversary. We think this is a worthwhile trend and utilize global funds across various portfolios we manage.

One of the most compelling reasons to go global is that it expands an investor's opportunity set. More than 50 percent of the world's total market capitalization is located outside the borders of the U.S. Developing economies are growing their gross domestic product at a much faster clip than developed nations and will increasingly represent a larger portion of the global economy in the future. In addition, many of the world's leading companies across various industries, such as BP, Vodafone, Toyota Motors, Samsung, Nokia and Nestle are domiciled in foreign countries. Thus, we think investors and advisors should cast a wide net in order to catch the most attractive investments.

Global funds also take advantage of how investment shops have organized their research efforts. While it was common practice in the past to have separate domestic and international teams, more fund companies today divvy up their research responsibilities across global sector teams so that an analyst covers all the companies in a sector regardless of where a company is domiciled. This research approach makes intuitive sense as globalization has led to a blurring of borders and companies are competing with one another on a global scale. An analyst covering automobile companies, for example, can't follow Ford and General Motors without understanding how Toyota Motors' impacts the global competitive landscape.

In short, we believe a global mandate can potentially add value as it allows investors the freedom to seek appealing investments without being forced to stick to geographical boundaries that are becoming less relevant in today's global marketplace.

We think the abovementioned Dodge & Cox Global Stock fund will be a very intriguing option right out of the gate (it is expected to become available May 1) and here are a couple of other global offerings we think are attractive:

Marsico Global: We have long viewed Marsico Capital Management as one of the premier growth shops in the business and believe that this relatively young offering has considerable potential. The fund will be managed by a talented trio of portfolio managers, Tom Marsico, James Gendelman and Cory Gilchrist, who have enjoyed success on other strategies that they have managed over the years. This fund leverages the research the firm conducts around the globe and can be thought of as the firm's best global ideas.

T. Rowe Price Global Stock: Lead portfolio manager Rob Gensler is a T. Rowe Price veteran who started at the firm as an analyst and had a successful stint as manager of the firm's Media and Telecommunications fund. At this offering, Gensler draws on the vast and high quality research staff at T. Rowe Price to select the most appealing growth companies across the globe, essentially creating a "best ideas" portfolio.

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