Why Invest in International Equity Mutual Funds?

Studies have consistently shown that investing in a mix of U.S. and foreign stocks has produced better returns - with less risk - than investing in the U.S. equity market alone. While investments in all mutual funds involve risk, investing in foreign securities presents risks such as currency fluctuations and changes in political, regulatory or economic conditions. All of these factors may result in greater share-price volatility.The simplest way to invest in international equities is through a mutual fund, which offers investors the following advantages, as stated by Iris Greenberger:

Diversification: Diversification helps reduce the risk of loss associated with any single investment. While diversification cannot eliminate risk entirely, it smoothes portfolio performance during periods of market volatility.

Professional Management:Most investors have neither the time nor the expertise needed to manage a large portfolio of securities. Mutual funds are managed by portfolio managers, who track the fund's holdings daily and decide what stocks to buy and sell.

Liquidity:Having liquidity means that any or all of your shares can be redeemed on any business day. You will receive the value of your investment at the close of the market. The value of the fund fluctuates with market conditions, and therefore, at redemption, the value of an investor's shares may be more or less than their original cost.

Convenience:The mutual fund handles all administrative aspects of share ownership. You will receive account statements, which include information on the tax status of any capital gains and dividends you receive.

To know more about the investing reasons in international equity fund,check this article: Why Invest In International Equity Mutual Funds?, by Iris Greenberger