SHOULD FLORIDA TRUSTS INVEST OVERSEAS?

A Florida trustee has a duty to invest prudently. We all know this. Florida trust law, like most states, has a prudent investor rule.

The domestic, US, stock market has been on a tear, with most of the indices up over 20% year to date.

Is now the time to look overseas?

If you are Florida trustee, and you read Barron’s, www.barrons.com, you may be considering investing overseas for your Florida trust. Barron’s is published by Dow Jones, www.dowjones.com, and is a sister publication of the Wall Street Journal, www.wsj.com. This week, commentary in Barron’s suggests that you consider investing 20% of your investable assets in emerging markets.

Florida trustees take note. Diversifying your investments to bonds, stocks, and mutual funds, and perhaps even currencies, outside of the United States may make sense for a portion of your trust investment portfolio. Florida law does permit the Florida trustee to invest in emerging markets, and in international investments. But you should know the difference between investing “internationally” and investing in “emerging markets.”

Why invest overseas now? The commentary in Barron’s suggests that while the US stock market has been on such a tear, and the last three years’ investment returns for emerging markets has been blah, rebalancing your trust portfolio now may make sense, including placing some money in emerging markets.