How to Invest in Global Mutual Funds

A global mutual fund may invest in stocks and bonds from around the world. Usually, these funds invest a portion of their assets in domestic markets, investing in European, Asian and developing regions as well. With global mutual funds, the primary advantage is the ability of fund managers to invest anywhere they see fit, seeking out the markets offering the highest returns.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Internet access
• Financial adviser or broker
• Money to invest

1. Understand that global mutual funds may take advantage of markets throughout the world. If one market performs poorly, global mutual funds can choose to move assets, investing in markets with more potential.

2. Recognize the difference between a global fund and an international fund. International funds do not invest in markets within the United States; global funds invest in both American and foreign markets.

3. Realize that by choosing to invest in a global fund, you may be overlapping some of the investments in your domestic mutual funds. Decide whether or not such overlapping is in keeping with your investment goals.

4. Understand the risks involved when you invest in global mutual funds. Besides the risks involved with any mutual fund, global funds encounter the risk associated with changing politics and fluctuating foreign markets.

5. Be aware that different parts of the world may have varied accounting processes and trading regulations. These factors may affect a fund manager's ability to trade in certain investment instruments.

6. Take a look at the global funds listed on MorningStar.com or LipperWeb.com. Select the funds with acceptable ratings or rankings to review and compare.

7. Request and review prospectuses for the global funds you find attractive. Review any available holding data, financial reports or fact sheets as well.

8. With the help of a broker of financial adviser, select the most attractive global funds and purchase shares. You may also invest by contacting some global funds directly.

Tips & Warnings

• Companies are required to update their prospectuses on a yearly basis. This ensures that you are able to obtain current information with ease.
• Consider your time horizon in determining your investment objectives. If you are investing for a retirement that is 30 years away, your time horizon is longer than an individual who is planning to retire in five years. Usually, an individual with a shorter time horizon may gravitate towards more conservative investments, while a person with more time to reach goals may be inclined to take more risks.