A world fund is a type of mutual fund that takes a global approach to investing. With this type of mutual fund, fund managers will potentially invest in any country across the world. This type of mutual fund is different from an international mutual fund because international funds only invest in countries that are outside the United States. With a world fund, a good portion of the funds can be invested in securities from the United States as well as foreign countries.

By investing in a world fund, individuals can significantly diversify their portfolios. With investments in many different countries, a recession or a downturn in one market will not completely devastate the portfolio. The investors still have holdings in many other countries that are most likely unaffected by the downturn in one country.

Another bonus of investing in this type of fund is that you do not have to worry about currency fluctuations or exchange rates. The mutual fund handles all of these aspects and purchases all of the foreign investments for you. Many people wish that they could invest in foreign securities but end up avoiding it because of the complexities involved. World funds eliminate most of these problems for the investor.

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