Top Funds for Exposure to Global Champions

Amid volatile markets and record gold prices, investors may find opportunities in global blue-chips whose underlying businesses have not eroded in the downturn

Morningstar.co.uk Editors 11 August, 2011 | 6:18PM

Being investors in a bear market can mean several things. Some could be making cautious portfolio choices driven by the overarching market fear and gloom, while others bet on bourses slipping even further and try to profit from this trend. The latter strategy is often credited with the origin of the term bear market – middlemen in the sale of bearskins would sell skins they have not purchased yet, hoping the future cost of “assets” or skins would drop below their retail prices.

A less pessimistic investor, however, may chose to read the current market downturn as an erosion of faith rather than an erosion of company fundamentals. Such an investor would look to pick up companies whose solid fundamentals could eventually help them recover their stock market losses.

Large cap companies have largely taken cautious action by both repairing their balance sheets following the 2008/2009 market collapse and sticking to a conservative expenditure and investment pattern. Brook Sweeney, consultant with Morningstar Associates Europe, explains that though this process may have been bad for economic growth, it’s a dynamic that has been good for corporate cash flows.

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.

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