Unlike international stock funds, global equity funds can invest in the U.S. markets, which can often provide them with protection from the volatility and uncertainty of foreign economies. While U.S. stocks tend to represent a significant portion of any global stock fund, many are widely diversified, and have made forays into the blossoming emerging markets.

Among the top longer-term performers in the sector, the $1.7 billion Vanguard Global Equity Fund (VHGEX) had about 43% of its assets invested in North American stocks as of March 31, 2005, with another 27% in Europe, 18.2% in the Pacific Rim, and 11% in emerging markets. Despite holding well over 450 positions, the portfolio adheres to Vanguard’s well-known practice of modest trading: annual turnover is only 20%.

Since late 2004, Vanguard Global Equity has employed a multimanager structure comprising London-based Marathon Asset Management LLP, which has managed the fund since its 1995 inception, and Boston-based Acadian Asset Management Inc.

Another top long-term global equity fund, the $196 million Polaris Global Value Fund (PGVFX), has recently reaped the benefits of investing in oil- and basic materials-producing nations like Norway, Canada, and Australia. Manager Bernard Horn maintains a “pure value” investment approach, with a particular emphasis on stocks with “undervalued streams of sustainable cash flow.”

Horn and his team screen more than 20,000 companies from 40 countries and whittle them down to create a portfolio of between 50 and 100 stocks, which initially are equally weighted in the fund. With a three- to five-year time horizon, the fund typically has modest turnover.

As of March 31, the Polaris fund had almost half its assets invested in either U.S. or U.K. stocks. Financials and consumer discretionary holdings represented the top two sectors, or about 40% of the total portfolio.–Palash R. Ghosh