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What is the reason for 'out of region' fund investments

aroominyork
aroominyork Posts: 3,157 Forumite
Part of the Furniture 1,000 Posts Name Dropper
edited 13 September 2020 pm30 12:03PM in Savings & investments

Funds often invest out of their core remit. For example, Fidelity Asia Pacific Opportunities has a remit to invest at least 70% in companies in the Asia Pacific region (excluding Japan) and currently has 16% in North America (mostly in a Canadian gold company) and Europe. 

What is the reason for this? Is it because there are links between the out-of-region companies and the core investment region, or simply to let the manager invest in totally unrelated companies which excite him/her?

Comments

  • I suspect it has more to do with flexibility for the manager.  There's not really any significant link with for the mining company with the Asia Pacific region for example.
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • dunstonh
    dunstonh Posts: 118,574 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    What is the reason for this?

    The fund has a remit to invest in companies that trade within that region but are not necessarily listed in that region.    

    We tend to filter out funds that do this in our research and look for 80-85% location-specific.  Otherwise, you are going to get overlap.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 13 September 2020 pm30 7:59PM
    Where else is there to park cash other than gold miners? 
    ASML speaks for itself. 
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