Admin Admin Jul 29, 2018 02:56 PM Other Shares The 3 Biggest Risks Faced by International Investors Investing internationally has often been the advice given to investors looking to increase the diversification and total return of their portfolio. The diversification benefits are achieved through the addition of low correlation assets of international markets that serve to reduce the overall risk of the portfolio. However, although the benefits of investing internationally are widely accepted theories, many investors are still hesitant to invest abroad. In this article, we'll discuss the reasons why this may be the case and help highlight key concerns for investors so they can make a more informed decision. These are the three biggest risks that international investors face: 1. Higher Transaction Costs Likely the biggest barrier to investing in international markets are the transaction costs. Although we live in a relatively globalized and connected world, transactions costs can still vary greatly depending on which foreign market you are investing in. Brokerage commissions are almost always higher in international markets than domestic rates are. In addition, on top of the higher brokerage commissions, there are frequently additional charges that are piled on top that are specific to the local market, which can include stamp duties, levies, taxes, clearing fees and exchange fees.