When the Dollar Fades, International Mutual Funds Shine

Many investors have turned to international mutual funds as a way to diversify their portfolio outside of the domestic market. These funds utilize a variety of investment strategies that can sometimes have much more promise than what you can find in the United States. This is especially true when the United States dollar is declining in value. 

Currency Exchange

If you are worried about the dollar falling in value, one of the best things that you can do is invest in an international mutual fund. When you put money into an international mutual fund, you will have to convert your dollars into another currency. While the money is in the fund, it will earn returns on your investment. Then, when you cash out your mutual fund shares, they will pay you in the foreign currency. If the dollar has declined in value while you were investing, you will actually be able to come out ahead on the exchange rate. You will be able to get more dollars for the foreign currency that you are trading. This gives you profit from the investment and profit from the currency exchange as well.


When the United States dollar falls in value, it has a lot to do with the economy of the United States. This happens when the economy is down and things are going poorly for a lot of people financially. When the economy is down, many investments also perform poorly. The companies that trade on the stock exchange depend on consumers to spend money with them. When no one is spending money, it has a negative effect on these investments. If you have all of your money in domestic mutual funds and domestic stocks, it can significantly hurt your portfolio during these times. By putting money into some international mutual funds, you will still be able to earn decent returns even if the domestic economy is down. 

Emerging Markets

Another benefit that you can realize with many of these funds is that you can invest into emerging markets. There are many areas across the globe that are considered to be underdeveloped by United States standards. Many of these areas are starting to develop slowly and build the necessary infrastructure to become a modern society. During these times, there is a phenomenal potential for investors to realize a return. All of the different types of businesses that can grow in these markets gives investors a great opportunity to profit.

Many international mutual funds specialize in locating emerging markets in the world and investing in them. By utilizing these funds, you will not have to do thorough research on choosing the individual companies that you need to invest in from each market. You can leave it up to a professional money manager that has contacts in the area to decide which companies should be invested in. These funds often provide great returns compared to what you can get in domestic funds.

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