What is Regional mutual fund?

A Regional mutual fund is a type of mutual fund managed by professionals who invest in securities from a specific region, like Latin America, Europe, or Asia.

A regional mutual fund usually holds a varied collection of companies that are located and operate within a specific geographical area. However, certain regional funds also invest in a particular sector of the region’s economy. For instance, a Latin American energy fund is categorized as a regional fund.

How It Is Work?

A regional fund is a type of mutual fund that pools money from multiple investors to invest in securities like stocks, bonds, and other assets. Some focus on a single asset class, like stocks, while others have a mix of different asset classes.

Money managers handle the fund’s investments to make profits for investors, either through capital gains, income, or both, based on the fund’s goal.

Regional funds are often seen as a way to invest in a specific geographic area for potential high returns. They are convenient for investors who may not have the resources or knowledge to diversify across multiple individual investments in that region.

Regional funds can be active or passive. Active funds aim to outperform a regional index, managed by a portfolio manager. Passive funds focus on reducing fees and mirroring the performance of a regional index.

Regional funds mainly invest in publicly traded companies, but a few active funds also allocate a small portion of their investments to privately held companies. These regional funds tend to have higher operating costs compared to U.S.-only funds, resulting in investment managers charging higher fees for them.


Regional mutual funds offer investors the opportunity to benefit from the growth potential of specific geographic areas and expand their investment portfolios globally. Nevertheless, these funds come with distinct risks, including political instability, currency fluctuations, and economic uncertainties, which are contingent on the region.