If I am American, can I buy a foreign mutual fund?

By Investopedia Staff AAA
A:

That depends. It is possible for you to buy a mutual fund issued in a country other than the United States; however, the mutual fund still needs to be registered with the SEC. This is the reason why many investors are turned away by foreign mutual funds. Typically, the foreign fund companies will choose not to market to the U.S. because they are able to sell enough of their mutual fund within domestic markets.

However, there is one exception to this registration requirement. If the mutual fund you are trying to purchase is privately issued to less than 100 people in the U.S. or is only issued to sophisticated investors who are considered qualified or accredited investors, then the registration requirement is waived.

It is also important to note that this mandatory registration extends to brokerage firms. If a foreign firm does not wish to register as a broker with the SEC, then that firm cannot legally do business with U.S. residents or U.S. residents living abroad. Once again, brokerages may decide not to register simply for business reasons, as marketing to U.S. clients may not be lucrative enough for the foreign firm to register with the SEC.

RELATED FAQS

  1. Which are the most popular mutual funds that target the financial services sector?

    Discover some of the most popular and highest rated mutual funds offered that hold stock portfolios in the financial services ...
  2. How does the price of oil affect Russia's economy?

    Discover how the changes in the price of oil affect Russia's economy. As a net exporter of oil, Russia depends on robust ...
  3. What emerging markets are best suited for investing in the financial services sector?

    Discover some of the primary emerging market countries that offer attractive investment opportunities in the financial services ...
  4. What effect has globalization had on international investments?

    Learn how globalization impacts international investment and transforms economies around the world. Understand the implications ...
RELATED TERMS
  1. Historic Pricing

    A method for calculating the value of an asset using the last ...
  2. Welfare Capitalism

    Definition of welfare capitalism.
  3. Foreign remittance

  4. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
  5. Ulcer Index - UI

    An indicator developed by Peter G. Martin and Byron B. McCann ...
  6. Heckscher-Ohlin Model

    An economic theory that states that countries export what they ...

You May Also Like

Related Articles
  1. Economics

    Iron Ore Market: Falling Into The Hands ...

  2. Professionals

    Are Alternative Mutual Funds, ETFs Right ...

  3. Stock Analysis

    What’s The Best Airline Stock In the ...

  4. Stock Analysis

    Can Modi Mania Continue?

  5. Investing

    What Has Been Groupon’s Growth Strategy?

Trading Center