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Look Beyond the Home Team?​

People tend to gravitate to what they know, but could this comfort harm your portfolio’s performance?

Behavioral economics has taught us that our cognitive biases create blind spots. One very common blind spot in investing is home country bias. People tend to gravitate to what they know and invest in their home country. It feels comfortable, but we believe it may harm your portfolio’s performance in the years ahead. Could this be an easily correctable mistake?
​​​​Chart of Domestic share of U.S. investors' portfolios calculated by comparing U.S. Equity and International Equity Morningstar categories​​​​​​​
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  • While U.S. investors have over $3 trillion of holdings in international equity mutual funds and ETFs; that pales in comparison to the nearly $11 trillion of U.S. equity mutual funds and ETFs that they own, according to Morningstar. This more than three-quarters allocation to U.S. equities stands in stark contrast to the modest global GDP that the U.S. economy actually comprises.
  • The result is that most investors own a disproportionate amount of stock in their home countries. For Americans, the biggest underweighting may be in Emerging Markets which comprise approximately 40% of global GDP and are expected to grow more than three times as fast as developed markets next year, according to the International Monetary Fund.
  • There may be an opportunity for investors to address their home country biases, as Emerging Market stocks have come down considerably this year and appear to be trading outside their historical discount to U.S. stocks on a price-to-earnings basis.
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​​​The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of December ​2022. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a ​recommendation to purchase or sell securities. ​​Alger pays compensation to third party marketers to sell various strategies to prospective investors. ​

​​ Risk Disclosures: Investing in the stock market involves certain risks, including the potential loss of principal.​ Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions, or other events could have a significant impact on investments. Past performance is not indicative of future performance.​ Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments.

This information is general in nature and should not be construed as legal or tax advice. Alger makes no warranties with regard to such information or the results obtained by its use. Alger disclaims any liability arising out of your use of, or any tax position, taken in reliance on such information. Always consult an attorney or qualified tax professional regarding your specific legal or tax situation.
​
​​Important Information for US Investors: This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund and ETF shares. Fred Alger & Company, LLC serves as distributor of the Alger mutual funds ​

Important Information for UK and EU Investors: This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit in​vestors. This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation. ​

​Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries.

​Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd.

Alger Group Holdings, LLC (parent company of FAM and Alger Management, Ltd.), FAM, and Fred Alger & Company, LLC are not authorized persons for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA.
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Important Information​ for Investors in Israel: This material is provided in Israel only to investors of the type listed in the first schedule of the Securities Law, 1968 (the “Securities Law”) and the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995. The Fund units will not be sold to investors who are not of the type listed in the first schedule of the Securities Law.
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The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries.​​​​

© 2022 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. A subscription fee is paid to Morningstar to access research, ratings, rankings and other investment tools.​

​ Fre​d Alger & Company, LLC 100 Pearl Street, New York, NY 10004 / www.alger.com​
​ 800.305.8547 (Retail) / 800.223.3810 (Institutional)​


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ETF Investors

This ETF is different from traditional ETFs.

Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. Specifically:

You may have to pay more money to trade the ETF’s shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information.

The price you pay to buy ETF shares on an exchange may not match the value of the ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders.

These additional risks may be even greater in bad or uncertain market conditions.

The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF confidential, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance. For additional information regarding the unique attributes and risks of this ETF, please refer to the prospectus.

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