How to Find Top Ranked International Mutual Funds

International mutual funds offer a way to diversify your financial portfolio. They also give you the opportunity to invest in the stocks of companies that do business outside of the United States, which can be beneficial when the U.S. markets are not doing well. There are international mutual funds that produce better returns than domestic mutual funds. Many investors find it desirable to have at least one international mutual fund in their portfolio. Of course, the investor will want to find funds that are going to offer good returns on a consistent basis.

Difficulty: Moderately Easy

Instructions

1. Go to Yahoo's Mutual Fund Center online, to the Mutual Fund Top Performers, International Stock Funds. The site is listed in the resources. Yahoo posts on this site the 10 top performers for the most recent three months, one year, three years, and five years. There are also links on this page for each stock, where you can find more information about each stock fund.

2. Go to Kiplinger's website, listed in the resources. Kiplinger's mutual fund center gives the 25 top rated international stock funds in three different categories: diversified, small/midsize diversified, and specialized.

3. Visit Lipper's website, and do a fund screening to find top international funds which meet the criteria you are looking for (site listed in the resources.) Lipper is a mutual fund research company that has a Lipper Leader rating system which shows a fund's success for meeting certain criteria. You can select such criteria as total return, tax efficiency, expense, consistent return, and preservation. You can also narrow your search further by finding a fund in just one country, like Switzerland, and the international fund asset type, such as bond funds.

4. Visit MSN Money site, listed in the resources. You will find a list of the top funds in three categories, top ranking, top performing, and large funds. These are further divided into type of international fund, such as Europe Stock and Foreign Large Growth Stock funds.

5. Join Morningstar. Morningstar not only produces a list of the top funds that can be found on MSN Money, but they also offer a premium service that you can subscribe to. With this subscription, you can get analyst picks for top performing international mutual funds, as well as a list of the best funds by category. (Site listed in the resource section.)

6. Visit a website of a mutual fund family. Go to T. Rowe Price's website, for instance. You can find two links on the mutual fund page on the site. One is for the four and five star T. Rowe Price funds as rated by Morningstar. The other is for the #1 Lipper funds. You can then sift through the list and determine which funds are international ones, by following the link to each fund and looking at its country makeup. For example, one of the #1 Lipper Funds is the New Asia Fund, which is an international fund.

7. Do your own independent research, coming up with factors that make up top funds for you, and finding funds that match these criteria. You can join a site like Scottrade, which offers mutual fund research at no additional charge.

Tips & Warnings

• There may be other factors to consider other than a fund's rank before investing in the fund. You might want to consider how long it has been ranked highly, and the consistency of returns. You might also want to investigate the strength of the economy in the countries where the mutual fund's companies are located.
• Even though a mutual fund is rated at the top of its type of funds, does not mean that it is a top performer. It could be, for example, that all China international mutual funds lost money over the past six months. So, even though you purchase a China mutual fund that is ranked high, you still may not make any money on it.
• Even though a mutual fund ranks high today, does not mean it will rank high tomorrow. A fund could have the greatest return of all times for the past six months, but then the next week the fund could under-perform substantially as compared to others in its category. Keep this in mind when investing.
• Mutual fund investments have no guarantees on your money or returns. Beware that you could lose part or all of your money that is invested in a mutual fund.

Resources

• Yahoo Site for Top Performing International Mutual Funds
• Kiplinger's site for Top Ranking International Mutual Funds
• Lipper leaders site mutual fund screener page
• MSN Money site for International Mutual Fund Top Funds
• Morningstar Site for Premium Mutual Fund Information