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. Because most international and global funds are considered to be aggressive growth funds or growth funds, investors must be willing to assume the risk of potential loss in value in the hope of achieving substantial gains. They are not suitable for investors who must conserve their principal or maximize current income. Growth and Income Funds Growth and income funds seek long-term growth of capital as well as current income. The investment strategies used to reach these goals vary among funds.