THE WORLD'S YOUR OYSTER GROWING U.S. INVESTMENT IN OVERSEAS FIRMS.

Byline: Staff and Wire Services

American companies have outsourced more and more jobs in recent years. Now, an increasing number of fund managers and everyday investors are outsourcing their money.

To a wise investor, it doesn't matter if a high-performing company is based in Chicago or Shanghai, if they deal in dollars or euros, said Erik Ridgley, the Los Angeles-based director and investment counselor of Citigroup Private Bank.

``In South Korea, which is still considered an emerging market, you are investing in Samsung,'' Ridgley said, giving an example. ``They are what we call a national champion. They can go toe to toe with any company in the world. They just happen to be in South Korea.''

The uptick of Americans investing overseas is yet another product of globalization. It helps diversify one's portfolio and can take advantage of robust international markets when those in the U.S. are sluggish.

< ``A good risk-reward payoff,'' Ridgley said, would be for a person to allocate about 25 percent of investment overseas.

In a global world with a $45 trillion economy, 7 billion people and an investable market cap of about $40 trillion, of which the United States accounts for about half, investing by region makes less sense than it once did.

``I think of the world as being without borders,'' said Rob Gensler, portfolio manager of T. Rowe Price Global Stock Fund (PRGSX). ``It's one global economy, with a lot of regional differences.''

In building his portfolio, which never numbers more than 100 names, Gensler has focused less on geography than on gathering the best investing ideas in the world. Key to his strategy is recognizing industry patterns as they're repeated across the globe. This has become more important as business models migrate and best practices get shared at faster rates.

``To think globally doesn't mean to invest in global businesses, it means, `I've seen this somewhere else, it's different here, but there are similarities,''' he said. ``Only a global manager has that full opportunity set and that mind-set. How do you predict the future? You can do it by looking around, and using what you've learned from other places, by recognizing patterns.''

Gensler's fund, a Morningstar Inc. pick in the world stock category, invests in mostly large-cap growth companies. U.S. companies account for the biggest chunk, making up slightly less than half the holdings; about a quarter is in Britain and Western Europe, 9 percent is Japan and the rest is scattered about in Latin America, Asia excluding Japan, and emerging markets. By sector, it's about 28 percent financial services, 13 percent health care, 12 percent telecom and 9 percent energy. The fund holds a number of names you know, as well as many you probably don't.

``The best name doesn't mean the biggest or the highest market share,'' he said. ``It's whether the trend is improving.''

Outside the United States, go-anywhere world or global funds are often the default core investment of individuals, said Kai Wiecking, an analyst with Morningstar. And with so many world-class companies based outside our borders, the global approach is increasingly appealing to U.S. investors.

``We certainly believe in the international market. It depends on a person's age and their risk tolerance, but we allocate something like 8 (percent) to 20 percent in international,'' said Kerrick Bubb, president of KWB Wealth Managers Group-Linsco/Private Ledger in Redlands.

``Just about everything you buy or touch is made somewhere - and it is not in the U.S.'' Bubb added.

When you start thinking globally, your perspective changes. What's domestic, anyway? New York-based oilfield services firm Schlumberger Ltd. draws 78 percent of revenues from outside the United States. McDonald's Corp., as American a company as you can imagine, also relies heavily on overseas revenues.

``Why would you restrict yourself?'' Wiecking asked. ``In the future, what I'm hoping to see is for the global fund to be the natural choice of beginning investors looking at just one stock fund to start out with, rather than combining a domestic and international fund, which in each case the manager is artificially restricted.''

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