You can avoid some of the problems
of investing directly in overseas markets by choosing
mutual funds or managed accounts that specialize in international
investments.
Some intermediaries invest broadly while others concentrate
on companies in particular regions or countries, those
of a particular size, or those that can be classified
as
growth
companies
or
value
companies. You can also choose international indexes
that track either stocks or bonds, or balanced funds
that include both stocks and bonds.
The advantage of using an intermediary for overseas
investing is that professional managers select investments
and monitor performance. The intermediary also handles
all the currency and taxation issues, providing you
with a statement of gains and losses calculated in
dollars.
There are major differences among mutual funds that
give you access to overseas investments that you should
be aware of as you choose one for your portfolio. International
funds invest exclusively in non-U.S. companies,
while global
funds (also called world funds) invest both in
the U.S. and abroad. Since a substantial portion of
a global fund portfolio might be invested in the U.S.,
this fund may not provide the level of diversification
you’re seeking by investing in other markets.
