Legal Definitions - single-country fund

A single-country fund is a type of investment fund that focuses its investments exclusively within the financial markets of one specific nation. This means the fund's portfolio will consist solely of stocks, bonds, or other securities issued by companies or governments operating within that single country. Investors might choose such a fund to gain targeted exposure to a particular economy, hoping to benefit from its growth or specific market conditions.

• Example 1: An investor wants to capitalize on the rapid technological advancements and strong consumer market in India. They decide to invest in a fund called the "India Growth Equity Fund," which explicitly states in its prospectus that it invests 100% of its assets in publicly traded companies headquartered or primarily operating within India.

  Explanation: This fund is a single-country fund because all its investments are confined to the Indian market, allowing investors to target that specific national economy.

• Example 2: A financial advisor recommends a client diversify their international holdings by adding exposure to a stable European economy. They suggest the "German Blue-Chip Income Fund," which is designed to invest exclusively in dividend-paying stocks and high-quality corporate bonds issued by companies based in Germany.

  Explanation: By limiting its investments solely to German companies and securities, this fund perfectly illustrates a single-country fund, providing focused exposure to Germany's economic performance.

• Example 3: A pension fund manager believes that the economic reforms and increasing foreign investment in Brazil present a unique opportunity. They allocate a portion of the pension fund's assets to the "Brazil Infrastructure Development Fund," which is mandated to invest only in Brazilian companies involved in infrastructure projects, energy, and related sectors within Brazil.

  Explanation: This fund qualifies as a single-country fund because its entire investment strategy is dedicated to the financial instruments and economic activities occurring within Brazil's borders.