What distinguishes global funds from foreign mutual funds?

The correct understanding here is that global funds include U.S. investments as they invest in companies from both domestic and international markets, making them more versatile in their asset allocation. Specifically, global funds can provide exposure to a diverse range of markets by including securities issued by U.S. companies alongside foreign securities.

In contrast, foreign mutual funds focus exclusively on investments outside the U.S. and do not include any U.S. based investments. This means that an investor in a foreign mutual fund is only exposed to markets and companies that are outside of the United States, which might limit diversification opportunities into the U.S. market.

Therefore, the distinction lies primarily in the inclusion of U.S. investments. Global funds can help investors capitalize on growth opportunities in various economies while maintaining a stake in the U.S. market, facilitating a more balanced portfolio.