Foreign Investment Risk Law and Legal Definition
Mutual funds that invest in foreign securities are affected by the following risks:
1. A country may impose withholding or other taxes that could reduce the return on the investments of the mutual fund in that country.
2. A country may have foreign investment or exchange laws that make it difficult to sell an investment of the mutual fund in that country.
3. Portfolio securities that trade on foreign exchanges may trade on days that the mutual fund does not offer or redeem its units or shares. There is a risk that such trading may significantly increase or decrease the value of the mutual fund when an investor is not able to purchase or redeem units or shares of the mutual fund.