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Definition of 'Country Fund'
An international mutual fund with a portfolio that consists entirely of securities, generally stocks, of companies located exclusively in a given country.
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Investopedia explains 'Country Fund'
Investors should be aware that country funds often show up in performance tables with some spectacular results and, because of this phenomenon, will attract a lot of investor attention.
However, along with this type of performance also comes a high level of risk and price volatility, especially in developing countries, which are usually categorized as emerging markets. In this instance, a fund's portfolio may be concentrated in a small number of issues with very low market liquidity.
Even in developed markets like Europe, putting investment funds in a single-country fund means that you are subjecting your risk-return expectations to a relatively narrow market environment.
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High returns come at a price, but country funds may still be a good bet.
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Find out what type of international fund might suit your needs, in order to gain exposure to foreign markets.
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