Investors seeking world investments can choose between global and international funds. What’s the difference?
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A broad range of investment opportunities exist outside the U.S. boarders. In fact, International Stock Markets now comprise more than two-thirds of the World’s Capitalization.
Investors who want to diversify their mutual fund portfolios may choose a Global Mutual Fund or an International Mutual Fund, what is the difference? International Funds invest in non-U.S. markets. Global Funds may invest in U.S. stocks alongside non-U.S. stocks.
What are the advantages and challenges of each? Global Funds offer the latitude of moving between U.S. and non-U.S. markets in order to take advantage of relative opportunities. The challenges that the investor may not know his or her exposure to the U.S. market within the portfolio at any given time. International Funds tend to work for investors who are looking to allocate a portion of their investments outside of the U.S. market.
As you consider a Global or International mutual fund be aware that the fund’s approach to the inherent currency risks may affect portfolio performance. There’s a lot to consider when evaluating investment choices.
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