The Global Fund: You Can't Get More Diversified than Planet Earth

The global fund has emerged as a great way for investors to diversify their portfolio. This type of fund has the capability to invest in any market in the world. Here are the basics of the global fund and what it can provide to you as an investor.

The Global Fund

Most mutual funds will invest only in their domestic markets. Other mutual funds, referred to as international funds, will invest only in markets outside of their domestic market. With the global fund, they will choose investments from the domestic and international markets depending on their investment criteria. This gives you a completely diversified portfolio to work with.

Investment Strategy

Each global fund will have a different investment strategies that they attempt to stay within. However, the common thread with all of them is that the fund manager has freedom to choose different markets to invest in. Fund managers have to do a great deal of research in order to find markets that are on the verge of growth. They also have to decide which companies within those individual markets are poised for growth. This makes the job of a fund manager in this type of fund much more detailed than normal.

With this type of fund, a fund manager can easily reallocate assets from one market to another. For example, they might have holdings in many different markets including China. Along the way, if the fund manager decides that the returns from the China portion of the portfolio are not up to par, they can reallocate those assets to the Middle East. This flexibility has the potential to eliminate negative performances and increase growth overall for the portfolio.

Securities

The global fund has the ability to purchase many different types of securities for the portfolio. Many of them will purchase stocks as the main asset for the fund. Others will focus on corporate bonds throughout the world. They might also invest in REITs or even other mutual funds. While some of these funds will focus on a certain type of security, others will diversify by buying some stocks and bonds.

Investment Considerations

As an investor, this type of investment should be something that you consider for your portfolio. Over the years, this type of fund has performed very steadily compared to other types of mutual funds. Since it can provide a level of diversification that is not present in other mutual funds, this effectively lowers the overall risk of your investment. This means that you can expect steady and continuous growth throughout the investment.

This type of mutual fund is not likely to ever suffer a devastating loss. While individual companies and countries could go under, the entire planet will not. Assets may shift from one region to another, but overall, someone is always doing will in the world. This means that you can feel relatively safe about this type of investment for the long-term.

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