What is an International Fund?

Diverse investment opportunities are becoming more important than ever for investors, which is why many are now looking to international funds to expand their portfolios. But because investing overseas can seem too foreign and unfamiliar, some shy away from this potentially beneficial investing experience. So before you miss out on this great diversification tool, take some time to learn more what they are and how they might benefit your portfolio.

What Are International Funds?

Those who are unfamiliar with overseas investing should know that this type of fund is very similar to the domestic ones. Basically, the major difference is that you investing in the stocks of foreign companies – those that most likely only own non-US securities.

Why Invest in International Funds?

Some take advantage of these types of funds for the following perks they offer:

  • Greater portfolio diversity. Because our economy stretches beyond the walls of the United States, taking the initiative to invest in international funds offers you true portfolio diversity. By taking this route, not only do you have an opportunity to take on new and diverse investment opportunities but if some of your domestic stocks are struggling, some overseas stocks may help keep you afloat.
  • Higher risk tolerance. Those who engage in diverse investment opportunities typically also benefit from high risk tolerance. Your mind already has calculated that even if you lose money in one fund, you have security in another. So the more investments you make, the more chances you’re likely to take, which can ultimately bring you higher returns.

It can seem a bit scary to make investments in companies you don’t know much about, but conducting thorough research on international funds on your own or with your broker can help you feel more secure. This way, you can engage in more diverse investment opportunities and create a truly multifaceted portfolio.