At a time of record low interest rates and limited returns on many asset classes, investors are increasingly looking abroad to boost their investment returns. International investment strategies span the globe and have a range of different risk and return profiles. As with many areas in investing, taking the first steps into international investments can be the most difficult. Being informed can be quite helpful.

Why investing overseas is beneficial

Economies around the world grow and contract at different rates and at different times. Even though worldwide lags in growth or recession can occur, economies generally show different rates of growth from one another. Savvy investors can get better returns by investing in growing economies, especially if their own economy is growing slowly.

Diversifying which currencies you invest in also provides a useful hedge; if the value of the currency of your home country takes a drop, investments in other currencies can balance out the losses. Finally, there are often investment opportunities abroad that are not on the radar of the wider investing public, which can mean outsized return – and in all likelihood, outsized risk as well.

Examples of good international investment strategies

Property is one of the most common ways for investors to spread their wings around the globe. Peter Chen of G8 Consultants is a Chinese Australian who has developed a vast property empire across East Asian economies. Chen has reaped the rewards of using capital to invest in property developments in economies where the investment could deliver extraordinary returns.

An alternative international investment strategy is to buy a company that is exposed to overseas markets. Greek business magnate Vangelis Marinakis has extensively invested in ship owning and ship management in his home country. Owning the means to global trade allows Marinakis to take advantage of a globalized economy to always enjoy incredible investment returns, regardless of the economic circumstances of his home country.

How to start investing internationally

There is an unlimited number of ways to enter international investments, and it all depends on your appetite for risk and how involved you want to be in the investing process. If you simply want to diversify your investment portfolio without taking on too much risk, you could consider a managed fund that invests in overseas assets. An investment firm manages these funds with experts, so you do not need to take any action to manage the investment. A managed fund carries a lower risk of loss of capital, but you will be charged management fees, so your returns will be lower.

If you have a lot of capital at your disposal and you do not depend on the capital for your livelihood, you could consider buying property in an overseas growth market. These property investments would require more active management from you, but the returns can be very large, especially if currencies move in your favor. However, if you are not a savvy investor, you could face very large risks when investing this way and possibly the loss of all of your capital.

Business owners have even more opportunities for international investment. If you are the owner of a business or a major shareholder, you could consider opening a production or marketing facility overseas. International business investments can be extremely profitable and are an excellent way to protect against downturns at home.

How much capital do you need?

Investing overseas requires very little capital. If you are participating in a managed fund, you can effectively treat it as an ordinary savings product. Putting away a small amount of your income every month can expose you to international investment markets and protect you against economic trouble at home.

However, if you really want to enjoy large returns on international investments, you also need to be able to invest large sums. It is not advisable to invest your pension provision in this fashion, but individuals who have lump sums they do not need for retirement could stand to make very large returns by investing six or seven figures abroad.

Investing abroad is open to everyone

Many people think that investing in foreign countries is only for the wealthy, but that is not the case. There are many good reasons that individuals with even modest sums to invest can benefit from diversifying into international markets. However, it pays to research the investment climate around the world before you take the plunge; even picking a managed investment fund will benefit from some insight into which markets offer the best combination of risk and return.