DEFINITION of 'Foreign Fund'

A mutual fund, closed-end fund or exchange-traded fund that invests in companies located outside of the investor's country of residence.

Also known as an "international fund."

BREAKING DOWN 'Foreign Fund'

Foreign funds offer individual investors access to international markets. Investing abroad poses risks, but can also help investors diversify their portfolios.

It is important to recognize the difference between global funds and foreign funds. Global funds can invest in securities from any country, including the investor's home country.

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