Global growth funds are a type of mutual fund that concentrates on the growth potential of a company. The idea behind global growth funds is to purchase for the sake of capital appreciation. This means that the investor is seeking to gain revenue in the growth stocks they purchase by receiving a greater return on the price of the growth stocks than what they paid for at market value. Investors purchasing global growth funds are more interested in investing in company stock that are growing and yielding a high return. These investors do not look for companies who pay dividends.
Investors seeking global growth funds are expecting large returns and rapidly increasing profit and so they are very selective of the companies they do business with. While the attraction of large profit margins is present with these funds, it is to be noted that global growth funds are not very stable. Therefore, there is a certain amount of risk and speculation involved when concentrating on the ever volatile growth funds market.
Global growth funds do very well in a bull market where there has been an economic recovery and there is an economic boom going on. These funds will yield large capital gains surpassing other forms of funds. However, the opposite effect holds true for bear markets. Global growth funds tend not to do very well when there has been a long stretch where prices are down and investors are cautious and often pessimistic about the economy in general. Investors do not often speculate and prefer more stable returns if they invest at all.
Global growth funds can be purchased in the USA by US investors or can be purchased internationally as well. There are several types of these funds and the investor can independently research the options, or can have a bank or other institution manage the search and the funds for a fee. Investment in any of these global funds requires the proper timing. Investors are expecting to make large capital gains in the shortest period of time. However, investors may be interested in themes rather than the largest profit market. An example of a theme would be mutual fund companies offering small cap investments. Another example of a growth fund theme would be the Global Privatization Fund. Here the emphasis is on companies that are about to privatize or have already recently privatized.
Although it might sound simple to seek out and invest in global growth funds; it is complicated. Getting the right fit for the investors needs along with the capital gains requires a shrewd investment strategy for maximum results.