What Is a World Fund?

What Is a World Fund?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

A World Fund refers to a type of mutual fund or exchange-traded fund (ETF) that invests in a broad range of assets across multiple countries and regions worldwide. The primary goal of these funds is to provide investors with a diversified portfolio, thus minimizing individual country risk and exchange rate risk. A World Fund might include equities, bonds, commodities, and other types of investments from both developed and developing countries.

Related Questions

1. How does a World Fund reduce investment risk?

World Funds reduce investment risk through diversification, spreading investments across different regions and sectors. This decreases the impact of a single country or sector performing poorly on the overall portfolio.

2. What’s the difference between a World Fund and Global Fund?

Want More Financial Tips?

Get Our Best Stuff First (for FREE)
We respect your privacy and you can unsubscribe anytime.

A World Fund and Global Fund both invest globally, but a Global Fund excludes the investor’s home country while a World Fund includes it.

3. What are the potential returns from investing in a World Fund?

Potential returns of World Funds can be substantial due to the exposure to developing markets with high growth potential. However, it also comes with higher risk, and returns can significantly vary.

4. How to invest in a World Fund?

One typically invests in World Funds through a mutual fund company or a brokerage account. The exact process depends on the platform, but generally, investors select the specific World Fund they’re interested in and choose the number of shares to purchase.

5. Are World Funds suitable for all investors?

World Funds may be more suitable for investors with a higher risk tolerance due to their exposure to various global economies and potential currency risk. Investors should consider their investment goals, risk tolerance, and time horizon before investing.