They are not as likely to invest in less stable, smaller companies which may provide short-term substantial gains at the risk of substantial declines. Growth funds provide low current income, but the investor's principal is more stable than it would be in an aggressive growth fund. While the growth potential may be less over the short term, many growth funds have superior long-term performance records. Although growth funds are more conservative than aggressive growth funds, they are still relatively volatile. They are suitable for growth-oriented investors but not investors who are unable to assume risk or who are dependent on maximizing current income from their investments.
Global funds seek growth by investing in securities around the world, including the United States.
The best way to invest abroad is through mutual funds, rather than direct investment in a foreign security. Most investors are unfamiliar with foreign investment practices and currencies and may not have a clear understanding of how economic or political events can affect foreign securities. International and global funds can invest in common stocks or bonds of foreign firms and governments. Many international funds invest in a particular country or region of the world. While international and global funds offer opportunities for growth and diversification, these types of funds do carry some additional risks over domestic funds and should be carefully evaluated and selected according to the investor's objectives, timeframe and risk profile.