Those who invest in overseas funds benefit from not having to pay capital gains taxes on investment switches by the fund. They also benefit from the traditional secrecy of tax haven jurisdictions. Because the fund is set up in a tax haven with a more liberal regulatory climate, the rates of return on investments tend to be higher than they are in the United States. This reflects the lower operating costs due to avoiding the regulatory paperwork required of domestic investment companies, as well as the hotly competitive nature of the offshore financial community. Since the fund is jointly owned by many different investors from different countries, it will be impossible for tax authorities to claim that the fund is merely a paper holding company and that, therefore, the funds' income should be treated as the income of the individual investor.
Overseas funds have an obvious independent business existence.
This protects investments in these funds from some of the heavy-handed tactics that fiscal authorities apply to corporations or trusts set up by individuals. Overseas funds put money into many kinds of investments. The funds invest extensively in the United States and Europe. They are a way for individuals to play the international money game with a small stake. They invest like any mutual fund and performance varies.