They pointed out that the United States is really part of a global market, and that the fortunes of companies here were linked to events across the ocean. This column will examine the various types of foreign mutual funds. I will compare their performance with domestic funds, and I will identify those with superior performance records. I want to begin by noting that many U.S.-based mutual funds do invest in foreign stocks.
Foreign funds come in several different flavors .
The last category is country-specific. Thus, at first glance, it would appear that sending your hard-earned dollars abroad may not be such a great idea. However, you need to remember that the same fund selection guidelines I have discussed previously with respect to U.S. funds also apply abroad. In other words, there are some terrific foreign funds and some very mediocre ones. If you believe that foreign diversification is good for your portfolio, you can find some excellent funds if you do your homework.