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. Investing abroad does involve some risks in addition to those normally associated with equities in general. For example, currency exchange rates can have a negative or positive impact on earnings reported by foreign countries.
Political instability can have a very negative effect.
Latin America has also been a very volatile region. For these reasons, you should be prepared to monitor any foreign investments more closely than your domestic holdings. In the global or world category, Morningstar lists 157 funds which have been in existence three years or longer. Morningstar shows 330 foreign funds with 3-yr records. Most single-country funds are traded like stocks.