Did you know there's a difference between a global fund and an international fund? In everyday conversation, we use the words global, international and foreign somewhat interchangeably. But in the fund business, these are subtle, yet important distinctions. Here are the main types of funds that you're likely to encounter.
Global FundsAs the name suggests, global funds invest throughout the whole world, including both the U.S. and foreign markets.
International FundsFrom an American investor's perspective, an international fund is one that invests outside the U.S. International funds are also known as "foreign" funds.
Regional FundsSome investment managers have particular geographic areas of expertise, such as Europe, Asia, or Latin America. Regional funds are designed to focus on a specific geographic region. Instead of buying a single international fund that invests all over the world, you can mix and match by buying funds that specialize in each of the major geographic regions.
Country FundsLet's say you're really interested in a particular country, but you don't have the time or expertise to pick individual stocks. Country funds offer an ideal solution. These funds invest exclusively in a single market, giving you a laser-like focus on a specific part of the world.
Global Sector FundsInstead of looking at the world through a geographic lens, sector funds concentrate their bets on a particular industry like health care or technology. The fund manager is free to choose his or her favorite stocks within the sector, regardless of where the company may be located.