 Personal Finance PowerPoint Presentation, Global Fund. Prepare to get financially fit by practicing personal finance. Most of this information comes from Investopedia Global Fund, which you can find online. Take a look at the references, resources, continue your research from there. This is by James Chen, updated April 27, 2022. In prior presentations, we've been looking at investment goals, strategies, tools, keeping in mind the major categories of investments that be in the fixed income, typically the bonds, the equities, typically the common stock. Also thinking about other tools we might use, such as mutual funds, ETFs, possibly helping us to diversify with less of an individual or upfront investment as opposed to if we invested in individual stocks, individual bonds. Keeping that in mind, we're now asking, what is a global fund? A global fund is a fund that invests in companies located anywhere in the world, including the investor's own country. So from an individual investor standpoint, we might think, well, how am I going to have my investments and be diversified? We could invest in individual stocks, but that can be difficult to diversify with. We might use mutual funds or ETFs, possibly looking, say, for one mutual fund that's quite broad and diverse. That would be the easiest method. Or we might want a little bit more control, although still using mutual funds or ETFs, by having multiple mutual funds that cover specific areas, such as possibly US stocks or sections in US stocks, possibly by market cap, and then possibly some funds that are abroad as well that can give us diversification over areas outside of the current country, from my perspective, typically the United States. If that's the case, then we've got to be careful in terms of, are we investing? Are we adding these other funds to our portfolio in such a way that we want them to include our home country? Or are we adding these other items to our portfolio and we want to add items that are just exclusive or other than our home country? So once again, a global fund is a fund that invests in companies located anywhere in the world, including the investor's own country. So a global fund seeks to identify the best investments from a global universe of securities. Global funds may also be passively managed. So we might have, say, an actively managed global fund where we're giving leeway to the fund manager, which would cost more for them to do that. We'd have to pay the fund manager. Or you might have more of a passive, such as something kind of like tied to an index, which could be cheaper on the expenses, and so those are the ways we can go. A global fund can be focused on a single asset class or allocated to multiple asset classes. So understanding global funds, a global fund provides investors with a diversified portfolio of global investments. Investing in international securities can increase an investor's potential return with some additional risks. A global fund can help to mitigate some of the risks and fears investors may have when considering international investments. So around the globe, investment regions are usually described as developed markets, emerging markets, and frontier markets. So if we're taking an investment strategy, we might first start to think, well, and I look at this mainly from a U.S. perspective of myself, that I might try to invest in my current country that I'm in at this point in time, which might be a more stable type of investment oftentimes. And then when we're reaching out to invest in more widely globally, possibly to help us to diversify, we might try to do so broadly across the world or like with our local investments, like when we categorize on different things such as market segment or on size of the company, market cap. We might then look at the globe and try to break out other investments in different categories, such as, once again, investment regions, which are developed markets, emerging markets, and frontier markets. And if we invest in index funds that are targeting each of those markets, that could give us a little bit more control on the percentages of our investments, for example, in each as opposed to investing in, say, one fund, which may cover all of that stuff and or cover our home country. So developed markets represent companies that have mature economies and efficient infrastructures, specifically for financial market transactions. So clearly, if we have a developed country, we would expect then it would be a more secure type of investment for us to be investing in, but also because they're already developed, we would think that there might not be as much potential for that pop, that huge growth. When you're looking at undeveloped countries, you might be saying, hey, look, if they just got a little bit more infrastructure, a little bit more capitalization in place, a little bit more money in the hands of the people, then you would think that the whole company or country could have explosive growth, which would be good for investment, typically. But in any case, emerging markets often provide the greatest opportunity for return, as they are some of the largest and fastest growing economies in the world. Frontier markets will offer the highest risk, as they are the least developed. A global fund can invest in any region or country in the world. It may choose a specific concentration, or it may invest broadly across asset classes and countries. Global funds can be offered as closed-end mutual funds, open-end mutual funds, or exchange trade funds, those being the ETS. Global fund investing. Investors can expand their investable universe globally to seek out greater returns by investing in global securities, can also increase risks. So clearly, pros and cons to investing globally. Therefore, global funds provide a leading investment option because their diversified investments can mitigate risk and also allow for the identification of top-performing investments. So oftentimes, no matter what country we're in, we're usually going to have a better feel for clearly where we are at. So when we're trying to invest outside of our comfort zone, it would generally take a whole lot of research for us to think about individual companies, what would be the best place to put our money. And so that's one reason when we're trying to diversify, we can use funds, possibly having an active manager to help with that or possibly just trying to invest in like an index kind of capacity so we can invest basically in the regions as a whole, as opposed to picking and choosing the individual stocks within it. Similar strategy as we've talked about with other types of funds as well. To further manage risk while attempting to generate a higher return, investors can choose to invest in both global debt and equity funds or hybrid funds which invest in both asset classes. Actively managed global funds are a popular choice for investors. However, passively managed index funds can also provide broader market exposure with diversification benefits. So when we're trying to classify our investments, we think about fixed-income investments, possibly bonds and stocks, for example. Then we might be broadening out and trying to think about investments in other places. We're probably first thinking about stocks investments, but we might have debt investments, possibly bond investments, for example, as well. So global debt, and so then when we think about these funds, we can think, okay, is the fund now giving me exposure to other countries and exposure to both equity and debt or do I want to look for funds that are giving me more global exposure just on debt so that I can then kind of more tailor my own percentages and my investment or just on equity and so on and so forth, and then you get in the weeds. So global debt, while there are many funds in the global debt category, some high-profile representative funds include the Vanguard Total International Bond Index Fund, the VTABX, which has over $91.9 billion in net assets as of late Q2, quarter 2, 2022. They got the American Fund's Capital World Bond Fund, that's the CWBFX, which has over $14.7 billion in net assets and the PIMCO International Bond Fund, P-F-O-R-X, with net assets of $12.4 billion. While each global debt fund has different features and allocations, each invests in various diversified portfolios of U.S. and non-U.S. fixed income securities. Global equity major funds in the large cap global equity space include the American Fund's New Perspective Fund, the ANWPX, with net assets of $132.5 billion as of Q2, quarter 2, 2022. American Fund's Capital World Growth and Income Fund, CWGIZ, with net assets of $117 billion and First Eagle Global Fund, the SGENX, which manages over $49 billion worth of assets. Global equity funds buy stock domestically and around the world and come in hundreds of combinations of guiding philosophies, allocation strategies, and management styles.