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Iraq, Venezuela and Russia are among the countries attracting global investment funds
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| Bonds Without Boundaries: global funds take your stocks anywhere |
Translated by IRAQdirectory.com - [7/28/2009]
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The global bonds fund concept has become acceptable and if the shares of American banks scare the fund managers, they can find banks of better data in relation to profits and risks in Brazil or India. There is not much to buy in Detroit, but managers may find value in "Toyota" or "BMW". Companies such as "Coca Cola", "McDonald's" and "Philip Morris International" are among the largest companies in the world; and fund managers can choose from the stocks in the world of investment without boundaries.
The idea of global bond funds is less sophisticated, but Michael Hasinstubb, who holds a doctorate in economics and manages the Templeton Global Bond Fund at a value of $13.3 billion, indicates that Americans are increasingly seeking to invest in foreign bonds and currencies.
Since Hasinstubb began managing that Fund in December 2001, it has achieved an annual return of %11.8 until July 13; at a rate better than the list of bonds of the government Global City Group by %4 annually. Last year, the Fund achieved returns of %12.4, and this indicates that the Fund is not strongly related to the U.S stock market, and in fact this is true; in 2008 made the bonds list of Templeton Global achieved %6.3.
It is a rather complicated Fund, and Hasinstubb, who works with 40people around the world, enters investments to solve three concerns: the risks of interest rate, the movement of currencies and the financial strength of governments. For example, in the beginning of this year Hasinstubb saw an opportunity in the debts of the Korean and Mexican governments, and concluded that the interest rates in these countries will fall and bonds will have some value on the local side. But he was not confident in the Korean won and the Mexican peso; if they fall against the dollar, the American shareholders will not benefit of the rise in the prices of bonds. So he bought the bonds (all his bonds issued by foreign governments or governmental bodies), but he escaped from the Korean and Mexican currencies.
Hasinstubb invest in about 20 to 30 countries, including Iraq, Venezuela and Russia, as well as in 10 to 15 currencies. For example, some of the currency groups include: the Malaysian Ringgit, the Chinese Renminbi, the Chilean Peso, the Brazilian Real and the Swedish Krona. But he is betting against the euro and the dollar of New Zealand; and in the United States, most of the Fund's holdings are of local bonds.
Hasinstubb has a pessimistic outlook towards the U.S. dollar on the medium and long term; he believes that the government is preparing well for a low currency value through printing and spending money, as well as nationalizing financial institutions. At a time when American consumers borrow at a lower rate and return the loans, he expects that the strong economic systems and currencies are in countries with rapidly growing local markets, such as China, India, Indonesia and Brazil.
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