January 2010

Variety may be more than just the spice of life. It also could help investors find opportunity among the best companies on the planet.

“Some of the finest businesses in the world trade on international equity markets, so it makes sense to be there,” says Jessica Hart, co-portfolio manager of the Northern Multi-Manager International Equity Fund. “And by using advisers with different styles and approaches, we try to lower the risks associated with international investing.”

Different horses for different bourses, you might say.

Of course, some of the potential pitfalls of investing internationally remain, including currency and political risk, among others.

Growth and value
Still, by blending four managerial styles — opportunistic and relative value along with aggressive growth and growth at a reasonable price — Hart aims to spread those risks as broadly as possible.

The opportunistic value component, for example, is designed to provide downside protection in difficult markets while the relative value allocation strives to outperform as the economy is rebounding. Those diverse value styles are balanced against the conservative and aggressive growth components.

“The multi-manager strategy could be especially useful in international stock markets,” she says. “You want diverse exposure to that asset class because of its vast opportunity set and additional areas of potential risk.”

Though the Fund invests in emerging markets, the portfolio is concentrated in large companies from developed economies.

Fine quartet
Hart highlights that the Fund utilizes Northern Trust’s painstaking process to select managers, optimize allocations between them, and monitor their results.

The objective is to beat the Fund’s benchmark, but with less volatility.

The Northern Trust Company of Connecticut (NTCC), which conducts extensive research on managers from around the world, has constructed and maintained multi-manager portfolios for institutional clients for three decades.

“Institutional investors have known for years that combining accomplished managers with diverse styles in just the right proportions could generate competitive returns with less risk,” Hart says. “Now we’re offering that approach to retail investors as well.”

So raise a glass to the well-blended Fund, balanced with finesse and mixed just right.

Past performance is no guarantee of future results.

Equity Risk: Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes.

International Risk: International investing involves increased risk and volatility.