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Four Funds for Europe

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It seems there’s been nothing but bad investment news coming out of Europe lately, but it would be a mistake to overlook the continent’s investment potential.

Here’s what advisors say are some top picks when it comes to Europe-focused mutual funds.

Erik F. Miller, CFP, ChFC, CAS, CMC Advisers LLC, Portland, Ore.

Our firm goes with two funds for international exposure: American Funds Europacific Growth (AEGFX) and Oakmark International (OAKIX).

David Herro of Oakmark has been astounding in the last three years.

Nearly 70 percent of OAKIX is invested in Europe and he has amassed category-beating returns with minimal exposure to emerging markets.

Some of the Europe-centered or even international funds have snuck as much as 16 to 20 percent of their holdings in to emerging markets, while Herro has been pure of style and amassed better returns. Very impressive.

While Morningstar has given AEGFX, Fund of the Year honors, Herro was crowned Manager of the Decade in this category.

Gerald A. Cannizzaro, Retirement Planning Services Inc., Oakton, Va.

T. Rowe Price Emerging Eastern European & Mediterranean Fund (TREMX): 97.4 percent invested in greater Europe; annualized return since 2000 of10.82 percent; $2,500 minimum for new accounts and $1,000 for IRAs; annual management fee of 1.64 percent.

The fund was up 125.13 percent in 2009 with an excellent management company and very smart fund manager. Best I can find.

This fund is not for the meek and mild, but will reward the patient investor long term. Best for IRA or other tax deferred account.

Carl J. Macko, MBA, CFP, Synergy Capital Management LLC, Atlanta

The Fidelity Nordic Fund (FNORX) invests at least 80 percent of its assets in Danish, Finnish, Swedish and Norwegian securities, as well as investments tied economically to the Nordic region.

Ninety-nine percent of the fund is invested in equities in the countries of Sweden, Denmark, Norway, Finland and Iceland.

It may also invest a smaller proportion in securities from countries apart from these. This fund returned 47.5 percent versus 31.78 percent for its comparable index in 2009.

You could almost look at this mutual fund as a European fund with little exposure to what we typically call ‘Europe’.

Although this fund is only ranked as three out of a possible five stars, it may be a good alternative-type European fund for investors who want European exposure, but not to the so-called PIGS: Portugal, Italy, Greece and Spain and their credit issues.

The fund has a very respectable expense ratio of 1.15 percent against a category average of 1.70 percent.

The fund’s top holdings include Novo Nordisk AS, Nordea Bank AB and Volvo.

For the seven-year period 2003 to 2009, the Fidelity Nordic fund has beaten both its fund category and comparable index (MSCI EAFE NR USD) in six of those years, which many would consider an impressive long-term track record.


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