Introduction to Choosing an International Fund: Style and Currency-Hedging Policy

Examining the countries that an international fund invests in is central to understanding whether the fund is right for you. If sharp market movements make you nervous, investing in a fund that concentrates just on Latin America or Asia’s emerging markets probably isn’t the best idea for you.

But the countries in which a fund invests constitute only one factor contributing to an international fund’s returns and volatility. Two other elements—the manager’s investment style and currency-hedging policy—play equally important roles. Thus, you have two additional questions to ask before buying an international fund.