Most foreign mutual funds and ETFs are classified as Passive Foreign Investment Companies (PFICs). PFIC investments face complex and often punitive tax treatment. Gains may be taxed at the highest marginal ordinary income tax rate (not the lower capital gains rate). Additional interest charges may apply. Annual filing requirements via Form 8621 for each PFIC
They likely mean US-domiciled ETFs which hold foreign shares. The big providers (BlackRock, Vanguard and friends) typically have copies of their big funds domiciled in, at least, the US and Ireland (or sometimes Luxembourg); the European versions are UCITS-compliant, and often offered in an accumulating variant (not tax efficient in the US, but it is in some European counties), but otherwise basically the same thing.
