In today’s interconnected world, investors are increasingly recognizing the benefits of diversifying their portfolios beyond domestic markets.
Mikko Vergara, head of Equities and Global Funds at Sun Life Investment Management and Trust Corp., highlighted the importance of global investing as a crucial strategy for long-term wealth creation.
“Global diversification gives your portfolio exposure to more economic growth catalysts and a wider set of issuers,” Vergara said. “By investing in companies and markets around the world, you can tap into diverse opportunities and potentially enhance your returns. For example, you may gain exposure to innovative technologies in Asia, diverse bond markets in Europe, or emerging economies in Latin America,” he said.
One of the key advantages of global investing lies in its ability to mitigate risk, Vergara said. “Global investing can introduce uncorrelated assets into your portfolio, which can help manage volatility during various market cycles,” he said, adding that “when domestic markets experience downturns, investments in other regions may offer a degree of insulation, helping to protect your overall portfolio value.”
However, navigating the global investment landscape requires careful consideration. “It is important to take note of the corporate earnings prospects of the markets you are interested in, along with the macro catalysts, such as political stability and monetary policy,” Vergara said.
An important step to take prior to embarking on a global investment journey is to carefully assess one’s objectives and risk tolerance. “Before getting into global investing, evaluate your investment objectives to assess if you have the risk appetite to invest offshore, and only invest in products that you understand,” Vergara said.
This is why Sun Life Investment Management has remained to be committed to bridge Filipinos to global funds, so they can be more confident to go beyond borders. “Our investments team and financial advisors can help you determine the appropriate level of global exposure so you can meet your long-term financial goals,” Vergara said.
With additional report: The Philippine Star
