Are you interested in diversifying your investment portfolio? If yes, international Mutual Funds could interest you. These funds pool money from investors to invest in a diversified range of foreign securities, offering you exposure to global markets.
As a savvy investor, delving into International Mutual Funds can provide opportunities for growth beyond domestic borders.
In this article, you’ll get to know the Purpose of investing in International Mutual Funds, exploring how to Invest in International Mutual Funds, and some of the best international funds to invest in.
What are International Mutual Funds?
International Mutual Funds are investment vehicles that pool money from investors to collectively invest in a diversified portfolio of assets outside their home country.
These funds offer exposure to global financial markets, spanning various countries and regions.
Managed by professional fund managers, International Mutual Funds aims to achieve capital appreciation and portfolio diversification.
Investors benefit from the expertise of fund managers in navigating global markets without the need for direct stock picking or market analysis.
How do International Funds Work?
Investing in international mutual funds mirrors the process of any equity mutual fund. Your funds, denominated in rupees, translate into allocated units.
The fund manager then channels these funds into stocks of foreign-listed companies. There are two methods used:
- Direct stock purchases to construct a tailored portfolio
- Or investing in an established global fund (Fund of Fund) with a predetermined mix of foreign stocks
Regardless of the approach, Indian mutual fund companies oversee these investments, operating within the regulatory framework set by the Securities Exchange Board of India (SEBI), ensuring adherence to established standards, much like other mutual funds.
Purpose of International Mutual Funds
International Mutual Funds serve to diversify investment portfolios by accessing global markets. Investors benefit from exposure to foreign assets, reducing risk associated with dependence on domestic markets.
These funds provide opportunities for capital growth and potentially higher returns by tapping into economies beyond one’s home country.
Additionally, they offer a convenient avenue for those seeking exposure to international stocks without the complexities of direct investment.
Overall, the purpose is to enhance portfolio resilience, maximize returns, and capitalize on the global economies.
How to Invest in International Mutual Funds?
Begin by understanding whether investing in international funds aligns with your financial goals and risk profile. Two primary methods for investing in international funds exist: online and offline.
- Online options include investment platforms like Dhan and asset management companies providing international mutual funds. You need to complete Know Your Customer (KYC) formalities to start investing.
- Alternatively, you can opt for the traditional offline route, involving brokers or submitting a completed form directly to a fund house. However, this takes time and is often inconvenient.
You should also consider tax implications, particularly in India, where international funds and Fund of Funds (FOFs) are classified as non-equity funds. Short-term gains are subject to higher tax rates compared to regular equity funds.
Best International Mutual Funds for 2024
Below are some of the best international funds to invest in (data as on 26th April 2024):
1. DSP World Mining Fund Direct
DSP World Mining Fund is primarily focused on prominent global firms within the mining and metals sector.
Through its investment in the BGF World Mining Fund, this portfolio centers on companies engaged in the production of base metals and industrial metals such as iron ore and coal.
This presents an opportunity to enhance wealth through global mining sector investments.
NAV: ₹17.8377
Fund Size: ₹152.70 cr
2. PGIM India Global Equity Opportunities Fund Direct
PGIM India Mutual Fund has introduced the PGIM India Global Equity Opportunities Fund Direct-Growth, categorized as an “Other” Mutual Fund Scheme.
The primary objective of this scheme is to achieve sustained long-term capital growth. It achieves this by investing in units of overseas mutual funds, with a specific focus on agriculture.
The fund targets entities directly or indirectly benefiting from the anticipated growth in the agriculture sector and its affiliated/allied sectors.
NAV: ₹43.0400
Fund Size: ₹1,444.20 cr
3. Franklin India Feeder – Franklin US Opportunities Fund Direct
The Franklin India Feeder Franklin US Opportunities Fund (Growth) stands out as an international open-ended fund-of-funds scheme recognised among the top global Mutual Funds.
Focused on prime growth companies in the United States across various market caps and industries, it enables Indian investors to participate in American corporate success.
By acquiring shares in the fund, investors gain direct exposure to the performance and potential growth of prominent US-based enterprises.
NAV: ₹69.4434
Fund Size: ₹3,616.19 cr
4. DSP US Flexible Equity Fund Direct
This fund strategically invests in leading US giants, particularly major players in the tech industry. You can get exposure to the global tech industry and can diversify your portfolio.
The approach of DSP US Flexible Equity Fund centers on durable, profitable, and well-priced (value) tech companies with a strong emphasis on financial performance.
NAV: ₹55.7772
Fund Size: ₹889.25 cr
5. Sundaram Global Brand Fund Direct
Sundaram Global Brand Fund – Direct Plan is a distinctive mutual fund investing primarily in shares of foreign companies. As a fund of funds, it strategically allocates its assets into a curated selection of mutual fund schemes, offering diversification.
This fund maintains a prudent approach by minimizing exposure to Unclassified sectors compared to peers.
NAV: ₹32.3018
Fund Size: ₹120.25 cr
Conclusion
Investing in international mutual funds offers diversification and potential for growth. By understanding your risk tolerance and conducting research, you can make informed decisions.
Keep an eye on economic trends and global events. For 2024, you can consider the listed best International Mutual Funds to enhance your investment portfolio and achieve financial goals.
FAQs
Can I invest in foreign mutual funds?
Yes, you can invest in foreign mutual funds through various schemes offered by Indian asset management companies, targeting global markets, including the US and Europe.
How can I invest in US funds from India?
You can invest in US funds from India by selecting mutual fund schemes that focus on US-based assets and equities.
How do I invest internationally?
To invest internationally, you can choose international mutual funds available in India, offered by Indian fund houses. These funds invest in diverse global markets and are regulated by SEBI.
Are international funds a good investment?
International funds might be a good investment if you’re looking for diversification and exposure to global markets. They are generally more suited for experienced investors with a high-risk appetite due to the volatility of global markets.
Happy Investing 💰
Note: This blog is not to be construed as investment advice. Please do your own due diligence when investing in mutual funds. The mutual funds mentioned above are examples, not recommendations.
