Are foreign investment funds better than domestic ones? There is no clear-cut answer to this question. While Polish investment funds are offered by any major bank, you need to contact private intermediaries if you are interested in a foreign fund. On the one hand, you run the risk of paying higher commissions, but on the other hand, the best funds are usually foreign funds. At most, the best Polish funds usually yield 50% of the five-year return on investment rate produced by the best global funds.
Description of foreign funds
Foreign funds do not differ much from the Polish ones in terms of their nature. They operate in very similar investment areas and offer the use of the same investment instruments, but often attract clients who want to invest in foreign markets, especially in those considered to be promising. This is because international funds allow you to invest in the shares of private Chinese companies, which have been highly recommended recently, or in communications development sectors in Asia Pacific.
Another difference may be in the currency in which the fund trades. Most investment funds that claim to operate internationally trade in US dollars or euros. This means that if you hold your assets in Polish zloty, you must take into account losses resulting from currency conversion.
Best investment funds in the world
There is a good reason why China was mentioned above: investment funds that have yielded the highest return on investment rate over the last five years are based on the Chinese economy. Out of 20 best performing funds, most operate within the area of shares from Asian countries. Apart from China, Japan and Singapore also perform well. Hong Kong and Macau, which are China’s special administrative regions, have their own, separate markets, and, by the same token, separate funds. They also perform exceptionally well, yielding return on investment rates of 30% on an annual basis.
Other potentially profitable funds are those based on shares from the technology sector; the best of them have return on investment rates of up to 80%. The markets that attract investors’ attention are mainly USA and, again, the countries of Southeast Asia.
Which part of the world is good for investing
Where and how should you invest in investment funds internationally? The positive trend in the Eastern technology sector is most likely to continue. Shares of Chinese and Japanese technology companies, and especially businesses that produce hardware, are therefore worth a closer look. This is because there is a constant demand for computer technology in Asia, although it has been observed that this trend is rather on the decline in the Western countries. The Western markets are very likely to be soon taken over by Chinese or Japanese potentates.
It is not recommended to invest in Africa, at least for the time being. In the past few years, investors who expected a rapid growth of African companies have been disappointed. Companies from Western and Central Africa often face challenges related to underdeveloped infrastructure and widespread corruption.
How to find a good investment fund
The best investment fund in the world is a fund based on shares of international technology companies. It is not difficult to find such funds. There are many free tools available online that allow you to base your search on the return on investment rate from the last year, two years or five years.
Funds that have yielded profits to investors over the past years are most likely to continue their positive trends; this is what you should bear in mind when looking for the right fund. However, you should pay attention to warning signs, especially when it comes to rather risky share funds. Political changes or crises may soon take a toll even on the most promising investment funds. However, in a favourable period, you may gain a return on investment rate of as much as 150% within 60 months.
You need to check carefully the rules of the fund, because the larger the fund, the more often it tends to be longer and more difficult to understand for a layperson. What is more, articles of association of an investment fund may only be drafted in English, and solid knowledge of this language is indispensable in foreign investments if the investor is considering longer collaboration with a fund. Polish intermediaries often fail to translate all of the original documents concerning a fund and only use abridged versions.
A foreign fund may also be a good idea for a person who is planning to emigrate or spend an extended period of time abroad and wants to collaborate with a fund for a longer time. Managing Polish funds while staying abroad is far less convenient than the reversed scenario. However, even you plan to spend your entire life in Poland, a foreign fund may prove to be an interesting alternative for what is offered by Polish banks and intermediaries.
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