Popular Foreign Stocks can be an excellent component in your overall portfolio, whether you’re seeking diversification or looking for new avenues for explosive growth. International expansion, productivity gains, and improving standards of living are producing a new global middle class, and these trends suggest that the world’s most dramatic economic growth will take place outside the United States. Many investors should strongly consider allocating a portion of their portfolio to stocks in international markets.
1. JD.com
China accounts for half of global e-commerce spending, and its online retail market is expected to grow substantially over the next several years. Alibaba is China’s largest business-to-consumer seller; JD.com is the country’s second-largest online retailer. It also stands out from competitors because of its focus on high-quality products and unmatched fulfillment infrastructure.
2. Alibaba Group (BABA)
Alibaba Group Holding Ltd., a China-based company, provides products, services, and technology to the People’s Republic of China and globally. J.P. Morgan estimates its trading value at $3.72 billion. NYSE ADRs are listed on the exchange.
3. British American Tobacco (BTI)
A leader in tobacco products (such as conventional cigarettes) and low-risk products, such as vaporizers, tobacco heating products, and modern and traditional oral products, British American Tobacco is headquartered in London, United Kingdom.
Mid-February, the group released its full-year 2020 financial results. Revenue came to 25.78 billion pounds sterling after adjustments. The profit from operations was 11.66 billion pounds sterling, an increase of 4.8% from last year. After dividends paid, the company’s free cash flow increased by 32.7% yoy to 2.55 billion pounds sterling.
4. Nokia (NOK)
Nokia is a Finnish tech company that provides network equipment, software, services, and licensing opportunities around the world. Traded as an ADR on the NYSE, with a market value of $112.40 million.
5. StoneCo
StoneCo, a payment-processing company based in Brazil, is benefiting from the shift away from physical money toward electronic ones, or, as it’s sometimes called, “the war on cash.” With 214 million Brazilians, StoneCo has a large market of potential customers, and the company is also poised to expand into other Latin American and South American countries as the digital payments market grows.
6. Shoprite Holdings
According to the United Nations, Africa expects to account for more than half of global population growth through 2050, and Shoprite Holdings’ position as the continent’s largest grocery chain will benefit from economic and demographic tailwinds. Founded in South Africa, the company also operates in 14 countries from roughly 2,900 locations.
7. Global X Copper Miners ETF (COPX)
The next option is an ETF, which gives investors access to a broad range of global copper producers. Leading the list are Canadian firms with 37.7%, followed by firms from China (9.9%), the U.S. (9.5%), Australia (6.4%), and the United Kingdom (6.1%).
Since April 2010, COPX has traded 33 holdings. About 54% of the $1.2 billion net assets held by the top ten holdings.
8. Bilibili, Inc. (BILI)
Bilibili is a video community that caters to young generations in China, offering content in areas such as lifestyle, games, entertainment, anime, and technology. The Nasdaq trades this ADR for $209.33 million.
9. ASML (ASML)
The top 10 most popular ADRs are rounded off by this Dutch semiconductor manufacturer. The company was founded in 1984, and it has over 60 locations throughout the United States, giving it a wide range of potential customers. There is also a trading value of $1.04 billion and the stock listed on the Nasdaq.
10. HDFC Bank
With India’s economy continuing to grow, HDFC Bank (NYSE:HDB), the country’s largest private lender, is in a strong position. The company operates in more than 2,900 cities and towns with over 5,600 branches. In addition to digital payments, HDFC is part of the war against cash and appears poised to benefit.
In what Percentage Should I Invest in International Stocks?
Most advisors recommend keeping international stocks to a small proportion of your portfolio. Up to 20% of your funds may invest in international stocks as part of your overall stock exposure. Rather than simply following a rule of thumb, you should carefully consider your own goals, risk tolerance, and financial situation before balancing your portfolio.
When American stocks fall, do international stocks tend to rise?
You shouldn’t mistake diversification for negative correlations, although international stocks may provide some level of diversification. Stocks in international markets typically move in similar directions as domestic ones, but they may not always do so, or they may do so with a different degree of volatility – that’s what makes them valuable for diversification. Stocks that move in the opposite direction as domestic stocks do not make good hedges.
Conclusion
Consider how comfortable you are with risk before investing in international stocks. You may prefer to focus on developed economies rather than emerging markets because emerging markets grow faster, but are also more volatile. With a clear strategy in place for your non-domestic portfolio, you will also better prepared to withstand market turbulence and pursue long-term gains.