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This type of mutual fund invests in stocks, bonds, or cash equivalents that are traded in overseas markets, or in indexes that track international markets.
Like other funds, international funds have investment objectives and strategies, and pose some level of risk, such as the risk that currency fluctuations may greatly affect the fund's value.
Some international funds focus on countries with established economies, some on emerging markets, and some on a mix of the two.
US investors may buy funds that invest in other markets to diversify their portfolios, since owning a fund is usually simpler than investing in individual securities abroad.
A different group of funds, called global or world funds, also invest in overseas markets but typically keep a substantial portion of their portfolios in US securities.
- Browse Related Terms: Contrarian, equity fund, Global fund, Growth and income fund, income fund, International fund, Investment objective, Portfolio turnover, Prospectus, Real estate investment trust (REIT), Tax-efficient funds, Transparency, Turnover ratio, Value fund, Vulture fund, World fund
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