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The growing global economy lets portfolio managers cast a wider net when searching for investments with the potential for investment returns. And it increases your mutual fund investing opportunities.
International funds invest in stocks of foreign companies and corporations. Global funds, on the other hand, include the United States along with international markets, creating an even larger investment universe.
Both international and global funds are core investments, meaning that they invest in developed markets, while targeted funds invest in emerging markets or specific countries or regions. The narrower focus of targeted funds can make them more volatile than core funds. But the risk may also depend on a fund's investment style (growth or value) or the types of companies in which a fund is invested.
American Century® Global Growth Fund invests in companies of all sizes located throughout the world-United States, Europe, South America, Asia-anywhere the fund's managers believe the best growth opportunities exist.
According to Global Growth Fund Portfolio Manager Keith Creveling, "Boeing is a good example of a global investment. It's a U.S.-based company, but much of its current growth and future growth prospects are outside the United States.
The variety of global investments available today can be a smart way to further diversify your portfolio and can help minimize the impact of volatility in any one country or region.
As you can see in the chart below, by the end of 2007, nearly 75% of global market capitalization (roughly $200 trillion) was outside the United States. At the same time the United States still represented a significant slice-over 25%.
Diversification does not assure a profit or protect against a loss in a declining market.
International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Past performance is not a guarantee of future results. Investment return and principal value will fluctuate, and it is possible to lose money by investing.