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For almost two years, this column has emphasised the importance of having a higher portfolio allocation to international equities. A badly overvalued Australian dollar, trading above parity with the US dollar in early 2013, strengthened the case to buy offshore.

But a bigger reason was gaining better exposure to industries poorly represented on ASX and improving portfolio diversification. After the bull market in bank stocks, the S&P/ASX Index is 63 per cent comprised of financial-service and material stocks. Heaven help this market if the banks slide and the resource sector finds new lows.

Today’s fast-growth industries – information technology, healthcare and telecommunications – are less than 12 per cent of this market. The global weighting of healthcare stocks, for example, as measured by the MSCI World ex-Australia, is almost double the weighting in the ASX 200.

Long-term investors have to look overseas if they want better exposure to the great social, demographic and technological trends of our time: an ageing population, the middle-class boom in Asia, rapid advances in preventive medicines, self-driving cars, robotics and the so-called “internet of things” where stgices talk to each other online.

To recap, this column initially suggested “buying the market” through exchange-traded funds (ETFs) over US equities in 2013, an idea that performed strongly.  With that market now in record territory, the column suggested a stronger focus on the beaten-up European and Japanese markets.

Recently, the column has investigated ASX-listed companies that invest in US residential or commercial property, given a favourable view on property in that market. It identified Listed Investment Companies (LICs) that invest in offshore companies, and trade below asset backing, as a way to gain exposure to international equities at a small discount.

Another international LIC that has caught my eye in recent weeks is the Templeton Global Growth Fund. Its top 10 holdings at December 2014 were Microsoft Corp, Amgen Inc, Samsung Electronics, Comcast Corp, Sanofi SA, Glaxosmithkline, Roche Holding, China Telecom Corp, Citigroup and Medtronic.

In March 2012, Templeton traded at a 22 per discount to pre-tax net tangible assets (NTA). By March 2013, the discount had narrowed to 13.8 per cent and a year later it was 10.8 per cent. The latest discount, in March 2015, was 6.8 per cent.

In the last six months, Templeton’s pre-tax NTA has lifted from $1.34 in October 2014, to $1.56 in March 2015 and the share price is following it higher. After five years of horrendous falls from the market peak in 2007, Templeton has got its groove back in a hurry.

Chart 1: Templeton Global Growth Fund

Source: ASX

My interest is in its underlying portfolio. Always assess the manager’s record and the underlying portfolio before investing in an LIC. Templeton’s portfolio has a high weighting in life science stocks, which might suffer in the short term if the US NASDAQ biotechnology index’s recent pullback continues, but has terrific long-term potential.

US medical-stgice maker Medtronics, drug stgeloper Amgen, French pharmaceutical company Sanofi, Swiss pharmaceutical company Roche Holding and pharmaceutical giant Glaxosmithkline are among the world’s highest-quality life science companies, and ideally positioned for an ageing global population in the coming decade. I also like Templeton’s exposure to Microsoft Corp, Samsung Electronics and Comcast Corp.

The fund is overweight healthcare and telecommunications stocks compared with its benchmark index, and has a large overweight position European equities and an underweight to US equities. That fits with my view of rotating out of US equities into better-value European equity markets.

In its March quarterly report, Templeton wrote: “Looking back on 2015’s first quarter, we were encouraged to see some of our key contrarian positions begin to stabilise and perform.”

Templeton is not for everyone. As a $292-million LIC, with a record of underperforming its index over 10 years, it suits experienced investors comfortable with higher risk.

Also, it was unhedged for currency movements, according to its 2014 annual report, and a 2.5 per cent franked dividend yield will not appeal to income investors. Only patient investors need apply as Templeton’s contrarian approach can lead to spells of underperformance.

But its position in Europe, investment in global technology companies, discount to NTA, and recent momentum make it a consideration for investors seeking greater offshore exposure in portfolios.

Tony Featherstone is a former managing editor of BRW and Shares magazines. The column does not imply any stock recommendations. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at April 29, 2015.