Jean-Marie Eveillard is a respected global-investment manager who runs the highly regarded, $1.9-billion SoGen International Fund.
You probably figure he spends most of his time shuttling around the world in search of the next hot stock.
But in fact, he works in New York and rarely leaves the country.
"I'm on the road maybe once a year," says Eveillard, a native of western France. "I might go somewhere for a couple of days and visit a few companies. That's about it."
Managing an international fund from a base in the United States may seem as odd as running a farm from a high-rise on Wilshire Boulevard. But it's more common than you might think. And the manager's location doesn't affect the overall performance of foreign funds all that much.
"I've never seen any evidence one way or another," says Anthony Cragg, a London native who manages the Strong International Stock and Strong Asia Pacific Funds from the unlikely locale of suburban Milwaukee.
Although there are obvious advantages to being close to a foreign market's pulse, there are also drawbacks, one of which is the danger of getting swept up in the local herd mentality.
Japanese investment managers, for example, have a reputation for mistiming their own market, lunging after stocks near market peaks and selling en masse near troughs.
"Foreigners have consistently done better in that market than the Japanese," says Cragg, who worked in Asia for nine years, then in London for seven before joining Strong in 1993.
Eveillard tells of some New Zealand brokers who recommended that he not buy New Zealand bonds back in the mid-1980s, even though they were yielding more than 20% at the time.
"The bond market there had been so bad for so long that the locals were discouraged," says Eveillard, who made the investment anyway, and turned a big profit.
"As outsiders, we could take a fresh look."
Another drawback to maintaining an office abroad is that you can only be in one place at a time anyway. Thus, there's no particular advantage to being headquartered in Europe, for example, if you're also buying Asian and Latin American stocks for your portfolio.
"When you're based in the U.S., you can be much more objective on all the international areas, even if you are probably a bit biased in favor of the U.S.," says David Peebles, manager of the USAA Investment International Fund.
He has outperformed the average international fund in each of the last four calendar years from his base in San Antonio.
And thanks to innovations in communications, it's a lot easier to keep abreast of foreign companies and markets than it was even a decade ago.
The world has changed a lot since the early 1960s, when Eveillard, as a young stock analyst, used to dart around the streets of Paris on a motor scooter, attending shareholder meetings and gathering annual reports in person as one of the few ways to pry information out of the tight-lipped French corporations of that era.
This isn't to say that some international fund managers don't spend most of their time far from American soil.
The ultimate globe-trotter in the fund business is Mark Mobius, an emerging-markets specialist for the Franklin/Templeton Group. Living in East Asia since 1965, Mobius estimates he travels about 100,000 miles a year on business. He maintains two offices--one in Hong Kong and one in Singapore--and speaks "bits and pieces" of six foreign tongues.
Mobius says his grass-roots research efforts depend on extensive travel.
International fund managers who don't have Mobius' tolerance for airline food and hotel rooms tend to rely on analysts to do a lot of tire kicking on location. Eveillard, for example, works with three analysts, and Peebles with two. Analysts at both companies spend more time abroad than do the two managers.
Cragg, however, spends six to seven weeks a year traveling.
Fund managers also purchase research from brokerages specializing in various foreign markets, often paying for this service by throwing commission business their way.
In the final analysis, manager location doesn't seem to be a critical factor in predicting the success of an international fund. But it may be more important for certain types of funds, such as those run by value managers focusing on smaller foreign stocks and emerging markets that aren't being closely picked over.
"If you're doing a lot of original research, it clearly helps to have people based around the world," says George Murnaghan, a spokesman for the T. Rowe Price fund group in Baltimore.
"But location isn't as important as other factors, such as the approach, style and experience of the people running a fund."
A former portfolio manager for GT Global in San Francisco has unveiled one of the first mutual funds to invest in Asian convertible bonds. The new Matthews Asian Convertible Securities Fund is the brainchild of Paul Matthews, former manager of GT Pacific Growth, and Carol Chuang, a Singapore native who has worked for several investment firms in East Asia.