(Published on 17-Oct-2020)Many readers are asking about International Mutual funds and some good International Mutual funds to invest. International Mutual funds are one category of Mutual funds which primarily invest in stocks of companies listed outside India. These funds are high risk in nature, however for portfolio diversification purpose, one can look into these Mutual funds. Based on the risk appetite and time horizon, one can invest into these International Mutual funds accordingly. Because of the volatility in Indian Markets, the International Mutual funds came into focus and becoming attractive among the investors.
What are International Mutual funds?International Mutual fund is one category of Mutual Funds which invests in companies located out side India. These are high risk Mutual funds and are suitable for the investors who are having high risk profile. Hence, this is suggestable for younger generation and who are looking for better portfolio diversification. As these funds are investing in companies located out side India, the risk exposure is high, but at the same time one can expect the chances of higher returns. As the increase in awareness of Mutual funds, the International mutual funds are getting popular among young generation whose risk profile is higher than an average Investor.
Why International Mutual funds?
- For tapping the earning opportunities out side the country
- For portfolio diversification
- For long-term alternative investment
- For hedging against rupee depreciation
3 Best International Mutual Funds to Invest
1. Motilal Oswal NASDAQ 100 FoF:
This is one of the best performer of International Mutual fund category. This fund has been yielding 20% + profits consistently from the last 7 years. Last 1 year the yielding's crossed 50%. Around 99% of its portfolio consists of Equity exposure and the remaining in Cash and money market securities. Top 5 sectors of its portfolio consists Technology, Cons durables, Services, Communications and Healthcare. Apple, Amazon, Microsoft, Facebook, Alphabet are some of the companies in its portfolio. This fund is suitable for high risk appetite investors and who wanted to invest for long term in SIP approach.
2. Franklin India Feeder Franklin US Opportunities Fund:
This is also one of the best consistent performer of its category. Yielding 25%+ from the last 3 years. Total 100% of its portfolio consists of Equity based. Hence, it is riskier when compared to Motilal Oswal NASDAQ 100 Exchange Traded Fund. It is a fund of funds investing predominantly in units of Franklin U.S. Opportunities Fund, an overseas equity fund. It invests in US companies through Franklin U.S Opportunities Fund. This fund provides long term capital gains. The ideal investment horizon is 5 years or more. As it is fund of funds, taxation will be similar to a debt fund instead of any equity fund. In equity funds less than 1 year is classified as short term, while in debt funds less than 3 years it is counted as short term capital gain.
3. DSP US Flexible Equity Fund:
This is one of the good International Mutual fund which invests mainly in companies outside India. This fund will also invests in the units of other similar overseas mutual funds. Around 95% its portfolio constitutes Equity exposure and the remaining in Cash and money market securities. From the last 5 years, the fund is being yielding inflation-beat returns and is most consistent performer in its category. Investors who wanted to take high risk and better diversification can look into this Mutual fund.
Points to Remember While Investing in International Mutual Funds:
- These funds are best suitable for High Risk appetite investors only.
- Investors are suggested to invest with long term time horizon and through SIP approach only
- As these are classified as fund of funds, the taxation will be similar to a debt fund instead of any equity fund.
- These funds are suitable for portfolio diversification and should not be more than 10% - 15% of your total investment portfolio
- It’s always better to invest with some professional guidance in the funds which is right for you and not just merely on last year’s performance to make quick bucks.
This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.