Covenant generally invests a portion of our clients’ equity portfolios in foreign stocks. In order to structure these portfolios with our targeted risk/reward characteristics, we typically use no-load mutual funds or exchange traded funds (ETFs) for diversification.
We select funds with long-term track records of attractive relative performance, high ratings by independent fund rating agencies, and relatively low internal expense ratios. Market conditions and global trends will guide us in establishing the overall balance between emerging and developed markets. In addition, relative valuation and growth expectations are considered when determining which regions and market capitalizations we believe should be emphasized.