Canadians need to start looking beyond their nation’s borders to find investment growth, according to John Welch, partner, Toron AMI International Asset Management, speaking Wednesday at the 11th Annual Institute of Advanced Financial Planners (IAFP) Symposium in Ottawa.

“We are global managers,” said Welch, “and we don’t ignore the Canadian market but it just doesn’t provide the diversity, the asset allocation, it’s far too risky – we determine.”

While Canada has been a “terrific place to invest” over the last decade because of the interest of emerging markets in the country’s energy and commodities, said Welch, that will not be the case in future as those same emerging markets change.

“As emerging markets move to more of a consumer-based economy, those critical factors [energy and commodities] that we have will no longer necessarily be what the new consumer is looking for,” he said.

Welch pointed to three key elements for investing in global equities: a strong adherence to risk management, a focus on companies with strong growth in cash flow and dividends and diversification across all sectors.

For a properly diversified global equity portfolio, Canadian investors need companies in sectors other than financials or energy which are already very prominent in the domestic market, said James Porter, partner and managing director, Toron. Instead, Canadians can look at global companies in other areas, such as healthcare.

In addition to looking for global opportunities, investors also need to keep an eye out for the risks, said Welch. For example, when looking at global equities, investors need to be mindful of taxes, liquidity, inflation, currency, brokerage costs, political uncertainty and shareholder rights.

To help mitigate some of those risks, Welch suggested using what he calls “proxy investing” whereby an investor can gain exposure to markets indirectly. Welch gave the example of 3M, a U.S-based manufacturing company that generates 65% of its revenue from outside of the country.

“One of the interesting things about investing globally, even from a Canadian/North American perspective,” he said, “is you don’t necessarily have to go into countries that are high risk.”