Travelling internationally and indulging in global cultures helps us discover new opportunities and experiences. It expands our understanding of the world market and enables us to see outside the boundaries of our homeland. The same ideology applies to investments. To grow as an investor, you must look beyond domestic investing options. Thankfully, you find various avenues that facilitate the same.
The International Fund of Funds or International Mutual Funds is a prime example of this. They are Mutual Funds that invest in companies located outside the investor's country of residence. Here are the reasons to consider investing in these funds:
- Exceptional portfolio diversification
A diverse portfolio includes a mix of high, medium, and low-risk investments. It evenly distributes any risk associated with a single high-risk investment. This way, it stabilises the investor's performance, especially when the market is down or unstable. When you invest in an International Mutual Fund, you diversify your portfolio effectively. For example, you have invested in Equity Funds that are not performing well.
However, your investment in World Gold Fund has been delivering promising returns. In this case, your risks are balanced out efficiently.
- Benefit from professional management
Often, investors do not have access to resources or relevant knowledge to manage their portfolios. This causes a hindrance in their investment journey. Since professional portfolio managers manage International Funds, investors need not worry about such concerns. These individuals hold extensive knowledge and experience in the international market.
They track the holdings under your Mutual Fund Investment. This further allows them to determine the sale or purchase of stocks on your behalf.
- Easy liquidity
Liquidity is crucial for any investment. It lets investors use their asset's shares in exchange for cash within a short period. Once you sell the share of your International Fund, you receive the amount equal to your investment's value at the time of the market closing. For example, you decide to sell a specific percentage of your World Energy Fund investment. Now, you will get the amount equal to your investment's current market value.
However, the fund's value depends directly on the prevailing market conditions. Hence, the amount you receive upon redemption could be above or below the original price of the share.
- Expands your horizons
When you merely invest in domestic instruments, you restrict your knowledge. You devoid yourself of new opportunities, experiences, and significant profits. As a result, you stagnate your progress in the market. To avoid this, you must consider getting out of your comfort zone. Investing in international schemes like International Mutual Funds serves as a viable option.
It expands your horizon, improves your understanding of global markets, and refines you as an investor. Moreover, it gives you a platform to earn better returns and amplify your wealth building. While these reasons are appealing, consider consulting an investment expert for proper guidance.
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