In recent years international business activity has been characterized by a dramatic increase in cross-border financial activity. International flows of financial securities have outstripped gains from goods and services trade and, consequently, investment opportunities were no longer constrained by domestic markets. These significant changes gave impetus to the popularity of direct or portfolio investments in foreign countries. In this paper we are going to concentrate on portfolio investment and compare investment opportunities in three chosen countries, particularly, Ukraine, Poland and UK. Moreover, we are going to include positive or negative recommendations concerning certain type of investment.

Foreign portfolio investment (FPI) is short- or long-term investing activity in corporate stocks and bonds, mutual and hedge funds, government bonds, pension and sovereign funds, various financial derivatives, certificates of deposit, real estate investment trusts, etc. Foreign portfolio investment is relatively liquid, mostly depending on the riskiness of the market where securities and other financial assets are held in. Moreover, FPI is the best choice for investors who are not willing to manage direct ownership rights of a foreign company.

There are several classifications of investors that we will use further in this paper. Firstly, investors are divided on those who invest for short-term gains (few days, weeks, months – up to 1 year) and long-term profits (more than one year). Furthermore, investors can be separated by risk tolerance, mainly, risk-seeking, possessing aggressive investment strategies (ready to take risk for possible higher returns), risk-neutral (consider only expected return from an investment) and risk-averse, or conservative, (look for “safer” investments even if return is low).