Expert Advice for Investing in Global Equities: Why Hemisphere Investments is Your Best Partner

Introduction

In today’s interconnected world, investing in Global Equities offers a wealth of opportunities for security price appreciation and portfolio diversification. However, navigating the complexities of international markets can be daunting without the right guidance. That’s where Hemisphere Investment Management (HIM) comes in. As a leading expert in global equity investment management, we provide our clients with the personalized strategies they need to succeed.

Understanding Global Equities

A global equities portfolio is composed of securities from both the United States and international stock markets. This differs from an international equities portfolio that only holds stocks from companies outside of the United States. Investing in global equities allows you to access high-quality companies worldwide, capitalizing on opportunities in the global economy. Global investing allows for both portfolio diversification and exposure to higher-growth markets.

Benefits of Investing in Global Equities

Diversification

Global investing spread risk across different geographies and economies. Diversification mitigates economic downturns in any specific country. By investing across multiple countries and industries, investors reduce over-reliance on any single market or sector. Many market-leading firms are either not included in benchmark indices such as the S&P or are significantly underrepresented. This broader exposure potentially yields higher returns in addition to the risk reduction benefit of diversification.

The level of diversification between asset classes within a portfolio is measured by correlation coefficients. Statistically, a correlation value less than 0.7 indicates that adding said asset class provides investors with opportunities to buy securities outside the U.S. that move differently from those from within the US. The result is a reduction in risk through stabilizing returns. Please note the correlation matrix below for statistics from 1988 to 2023.

Potential growth

Many emerging market countries offer opportunities to earn substantial returns and higher potential growth prospects not available in developed economies. Solid economic growth, increasing industrialization, a strengthening financial sector, and government policies enabling transition to a free-market economy characterize many of these countries. Said countries have favorable demographics, such as a relatively younger, well-educated workforce and a growing middle class. With increasing income, a trend toward greater consumer spending is creating GDP stability. Combining favorable demographics with government policies in many countries that are favorable to investors, investment is attractive.

Kent Smetters, professor of business economics at the Wharton School of the University of Pennsylvania and a proponent of passive index investing, observes that value exists in emerging markets. He wrote: “But in certain niche markets, like emerging markets…where assets are less liquid and fewer people are watching, it is possible for an active manager to spot diamonds in the rough.”[1]

Risks associated with global investment

While global investing offers significant rewards, it also introduces unique risks. This is especially true of emerging market investment. Political instability, regulatory uncertainties, and market volatility can affect individual countries differently. Currency fluctuations are another risk, as exchange rates between the U.S dollar and the foreign currency can affect returns. Economic and individual company factors must be appropriately assessed.

As an experienced advisor, HIM is aware of countries and stock markets subject to the above-mentioned risks. All 47 stock markets included in the MSCI All Country World Index have regulatory oversight of their listed companies. Hemispheres owns market leading or high-quality companies, of which many adhere to international accounting standards; some companies even dually report their financial results using their domestic market accounting standards and U.S accounting standards (U.S. Generally Accepting Accounting Standards [GAAP].

We should mention that the world’s regulators often work together to coordinate reporting standards. Importantly, most of the securities selected by HIM for client accounts trade on U.S. exchanges in the form of American Depositary Receipts (ADRs). Through ADR investment, the regulatory, tax and legal framework complies with U.S. laws, regulations and practices. Further benefits of ADRs include improved liquidity for U.S. investors investing in foreign stocks, and tax treaties avoid double taxation. ADRs are not included in the U.S. benchmark indices.

The Importance of Professional Investment Advice

Investing in global equities can be complex, with numerous factors to consider as outlined above. Seeking expert advice from a trusted partner like Hemisphere Investments is crucial to help you achieve your investment goals.

Hemisphere Investments’ Expertise in Global Equities

Hemisphere Investments has a proven track record of success in managing global equity portfolios. Our team of experienced analysts and portfolio managers possesses a deep understanding of international markets and the factors that drive investment performance. HIM’s historical investment performance (net returns) through FYE 2023 is shown below:

Customized Investment Strategies

At Hemisphere Investments, we manage each of our client’s portfolios as a separate account. We customize our investment strategies to meet the unique goals and risk tolerance of each client. Our personalized approach ensures that your investments are aligned with your long-term financial objectives.

Risk Management Strategies

We employ rigorous risk management techniques to protect your investments and minimize losses. Our portfolio diversification strategies help to spread risk through limitations on position size, by asset class, industries, country and geographic regions.

Market Insights and Research

Our team of investment analysts and portfolios have the expertise to conduct in-depth research and analysis to stay ahead of market trends and identify emerging opportunities. HIM utilizes advanced technology and tools to analyze large data sets that identify patterns, trends, and investment opportunities globally.

Conclusion: Partner with Hemispheres for Expert Investment Advice

Partnering with Hemisphere Investments can provide you with the expert guidance and personalized strategies you need to succeed in global equity investing. Our commitment to excellence, combined with our deep understanding of international markets, sets us apart as a trusted partner.

Please contact Hemispheres Investment Management for a free consultation. We provide guidance and strategies to assist you optimize your investment policy and help you achieve your investment goals. Book a meeting.

[1] https://executiveeducation.wharton.upenn.edu/thought-leadership/wharton-wealth-management-initiative/wmi-thought-leadership/active-vs-passive-investing-which-approach-offers-better-returns/