International Fund.

In plain English

An international fund holds stocks or bonds of companies based outside your home country, giving you exposure to economies and currencies beyond the US in a single investment. It spreads risk, because foreign markets do not always move with the US, but it adds currency risk, since a stronger dollar can shrink foreign returns when converted back. Some funds focus on developed markets, others on emerging ones, and many broad index funds already include an international slice.

01Why it matters

An international fund is the simplest way to diversify beyond US markets, but the added currency risk means foreign returns can look different once converted to dollars.

02The math, step by step

You add an international index fund to your portfolio. When US stocks lag but European and Japanese markets rise, the international fund cushions your overall return.

03What this is NOT