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.
Related Fool Articles
Recent Mentions on Fool.com
- Who Wins If Solar Subsidies Plummet in 2017?
- Zogenix Zoomed Higher in November -- Here's Why
- 3 Stocks We Like -- but Not for Retirees
- 3 Things About Energy Transfer Equity LP That Worry Me
- 2 Stocks This "Fund Manager of the Decade" Is Buying -- and One He's Selling
- Why WisdomTree Investments, Inc. Stock Dropped Today