Wilmington Trust Looks to Maximize Global Opportunities

“If you invest internationally, you are getting the currency diversification that you didn’t have before and you can actually benefit when foreign currencies are strengthening and earn more in dollars, even if local stock market returns are not strong,” Miller said. “So currencies are important by themselves but it’s also important to get a handle on currencies because returns are very highly correlated to what is happening to a particular currency.”

And while individual geographies by themselves don’t matter so much to Wilmington Trust, there are nevertheless some issues that affect certain countries more than others, and the company looks to its selected managers to be aware of those.

“In some countries, the standards of corporate governance, for example, are lax, and the courts are not as free and transparent as we’d like them to be,” Miller said. “One can hesitate in investing in those countries so we pick and choose among managers to see who’s investing where, and we carefully monitor our managers, talking to them once a quarter in tandem with their reporting cycles, about their investments, rationale and so on. If we don’t like where they’re investing, we won’t go with them.” Miller and other members of the team travel often to meet the managers, most of whom are located in London and New York, with a few in Chicago, face-to-face in order to interact closely with them and maintain a close relationship.   Miller worked at the Export-Import Bank of the United States for 15 years, during which time he had the opportunity to travel to many different places in the world. Although he doesn’t travel too much in his current position, he believes it’s important for the managers and analysts of the investment products that Wilmington Trust chooses to be seeing the world up close. His experience of world travel has given him a keener and more informed sense of what’s happening in the world, and this has helped him become Wilmington Trust’s bespoke “International Guru,” he said.

Wilmington Trust favors actively managed funds over ETFs because “ETFs aren’t exposing investors to either the best or the worst companies as they’re passive investments,” Miller said. “They work best if an investor has a view on a particular country doing well, but we favor an active management strategy for what we’re looking to achieve.”