An international fund is a mutual fund that invests in the stocks of foreign countries. They vary widely. Check the prospectus for details of which countries or groups of countries are represented in a given fund.
Diversification plans often seek to protect against declines or take advantage of higher growth rates outside the US by including sizeable international fund allocations. That strategy can succeed, but increasingly the global economy is interdependent, and the speed of communications allows a business manager to be immediately aware of factors affecting demand in the US or other developed countries. Hence, the tendency of foreign markets to lag the US economy is much reduced. Often the US or other developed countries are major customers of the foreign companies with the result that the hedging value of international funds is reduced compared to what it once was.
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