Regional Fund

A mutual fund that confines itself to investments in securities from a specified geographical area, such as Latin America, Europe or Asia. A regional mutual fund will generally look to own a persified portfolio of companies based in and operating out of its specified geographical area. However, some regional funds can also be set up to invest in a specific segment of the region's economy, such as energy.

For the investor, the primary benefit of a regional fund is that he/she increases his/her persification by being exposed to a specific foreign geographical area. These funds are practical for the average investor, since most people wouldn't have enough capital to adequately persify themselves across many investments in the region.

Regional funds select securities that pass geographical criteria. They are not to be confused with other mutual funds such as international funds, which attempt to provide investors with a persified portfolio spanning the globe, or country funds, which provide investors with persified exposure to companies in one specific nation.