Portfolio Investment

The purchase of stocks, bonds, and money market instruments by foreigners for the purpose of realizing a financial return, which does not result in foreign management, ownership, or legal control.An example would be buying shares in a foreign company, the purchase of bonds which were issued by a foreign government,acquiring assets in a foreign country or purchasing stocks in a foreign company. Here are some factors which might affect international portfolio investment:the tax rates on interest or dividends,preferred countries are those with a relatively low tax rate;another one would be the interest rates,money mostly flows into countries with a high interest rate; and last but not least the exchange rates, countries with a currency expected to strengthen is more attractive to an investor.