Define: International Fund

An international fund refers to a pooled investment vehicle that invests in securities, assets, or projects located outside of the investor’s home country. These funds are managed by professional portfolio managers or investment firms and are typically designed to provide investors with exposure to global markets and diversification beyond their domestic investments. International funds may focus on specific regions, such as emerging markets, developed economies, or specific countries, or they may have a broad global mandate. They may invest in a variety of asset classes, including stocks, bonds, commodities, real estate, or alternative investments. International funds offer investors the opportunity to access investment opportunities in foreign markets, potentially benefiting from growth opportunities, market diversification, and currency exposure. However, investing in international funds also comes with risks, including currency fluctuations, political instability, economic volatility, and regulatory differences across jurisdictions. Investors should carefully consider their investment objectives, risk tolerance, and investment time horizon before investing in international funds.

An international fund is a mutual fund that invests in stocks and/or bonds of foreign companies. Some invest in only one country or region of the world, while others are not limited. Investors choose an international fund largely because of the potential for the growth of foreign markets. Growth in areas such as Latin America and the Far East can make an international fund perform very well. Because of political and economic instability, an international fund can be volatile; for example, it can have a high currency risk. Thus, international fund investors often study a region thoroughly before they invest in it. Other funds, however, can be quite stable. An international fund can offer investors a fairly high degree of diversification. International fund investors often have high-risk tolerance.

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This glossary post was last updated: 29th March 2024.