Global Investing Do's And Don'ts From A Top Investment Manager

"First, as a Canadian investor looking to invest globally, you have to ask yourself what is your view on the Canadian dollar," Mr. Graham says. "Those who believe that it is likely to remain strong should probably invest with managers who hedge the Canadian currency." Global mutual fund managers who hedged the Canadian dollar recorded superior performance in recent years. Among the few global mutual funds that hedge are the GGOF HighYield Bond Fund and the GGOF Asian Growth and Income Fund. Second, Canadians should look to invest abroad in sectors that aren't available here, he says. "Canada has a very concentrated stock market with 45 per cent in resources and 35 per cent in financials and it doesn't have a lot of exposure to a number of important sectors such as pharmaceuticals or consumer staples where you can buy world-class companies such as Johnson and Johnson, Cadbury Schwepps or Nestle which have very reasonable valuations at 13 or 14 times earnings, paying 3 to 4 per cent dividends. If you are concerned about the U.S. dollar, these are multinational companies and exporters so they will have some natural protection against a weaker U.S. dollar." http://money.canoe.ca/PersonalFinance/2006/07/07/pf-1673219.html

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