Global Mutual Funds in India

Global Mutual Funds in India

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What are Global Mutual Funds?

Global Mutual Funds / International Mutual Funds are mutual funds that invest in companies located outside the investor’s country of residence. They are also known as foreign funds.

International funds can follow two ways to invest your money –

  • Purchase stocks directly and build a portfolio. In this case, the expense ratio is typically charged by AMC’s.
  • Invest in an existing global fund with a pre-existing portfolio of foreign stocks. Here expense ratio would be an addition of feeder fund (Indian AMC) expense ratio and underlying fund (global fund) expense ratio. SEBI has capped this at 2.25%.

Whatever the method followed, funds are eventually managed by Indian AMC, and they have to follow SEBI guidelines.

 

Different types of Global Mutual Funds in India

From the options available to investors, Global mutual funds can be classified into-

Thematic International Mutual Funds

Like domestic thematic mutual funds wherein the fund follows a theme-based investing approach, a thematic international fund will invest in the stocks of foreign companies belonging to the concerned theme.

 

Region or country-specific

These funds invest in the stock market of a particular region or a particular country. The main motive is to take advantage of the opportunities presented by these markets to make good profits.

 

Global markets

Instead of catering to a specific country or region, these funds invest globally and have a portfolio consisting of stocks of companies from across the world. The main aim here is diversification.

 

Why invest in Global Mutual Funds in India?

201520162017201820192020
NIKKEI
(JAPAN)
9.33%
FTSE
(UK)
-17.22%
HANG SENG
(HONG KONG)
35.07%
BSE SENSEX
(INDIA)
6.67%
DJIA
(US)
22.24%
NIKKEI
(JAPAN)
13.43%
KOSPI
(KOREA)
1.81%
DJIA
(US)
15.24%
BSE SENSEX
(INDIA)
28.06%
DJIA
(US)
-6.03%
NIKKEI
(JAPAN)
20.93%
KOSPI
(KOREA)
6.68%
DJIA
(US)
-2.29%
KOSPI
(KOREA)
5.61%
DJIA
(US)
24.33%
FTSE
(UK)
-11.95%
BSE SENSEX
(INDIA)
14.94%
DJIA
(US)
-0.72%
FTSE
(UK)
-4.18%
BSE SENSEX
(INDIA)
3.91%
KOSPI
(KOREA)
20.72%
NIKKEI
(JAPAN)
-14.85%
HANG SENG
(HONG KONG)
12.17%
BSE SENSEX
(INDIA)
-5.05%
BSE SENSEX
(INDIA)
-6.35%
NIKKEI
(JAPAN)
3.6%
NIKKEI
(JAPAN)
16.18%
HANG SENG
(HONG KONG)
-15.3%
KOSPI
(KOREA)
9.34%
HANG SENG
(HONG KONG)
-10.32%
HANG SENG
(HONG KONG)
-7.62%
HANG SENG
(HONG KONG)
3.16%
FTSE
(UK)
7.10%
KOSPI
(KOREA)
-17.91%
FTSE
(UK)
3.13%
FTSE
(UK)
-20.05%

Source – ETMoney

 

Benefits of Investing in International Mutual Funds

Diversification of global scale

Further minimizes your portfolio risk in case of bad economic conditions or poor returns from one particular market.

 

Become the owner of big global businesses

These global businesses are not dependent on one market for their revenue, making them excellent investment prospects.

 

Currency diversification

If the Rupee falls against the foreign currency in our investment period, our gains increase, as illustrated below.

Money Invested₹ 10,000.00
The prevalent dollar value in rupees₹ 75.00
Conversion to dollars$ 133.33
Portfolio increased to$ 150.00
The current dollar value in rupees₹ 77.00
Portfolio conversion in rupees₹ 11,550.00

 

Risks of Investing in International Mutual Funds

Economic and political risk

Political unrest or economic turmoil can negatively impact your investments.

 

Currency risk

If the Rupee rises compared to the foreign currency, then returns reduce accordingly; inversely to the illustration mentioned above for benefits from currency diversification.

 

Taxation of Global Mutual Funds in India

Even when investments are in equities, returns from international funds are taxed the way debt funds are taxed.

Short term Capital Gain

If redeemed within three years, the gains will be considered STCG and taxed at 15%

Long term Capital Gain

If redeemed after three years, the gains will be considered LTCG and taxed at the rate of 20% after indexation.

 

Best Global Mutual Funds in India

Fund NameLaunchNet Assets (Cr)1 Yr Ret (%)3 Yr Ret (%)5 Yr Ret (%)10 Yr Ret (%)Standard DeviationSharpe RatioFund Manager
Aditya Birla Sun Life Global Emerging Opportunities Fund17-Sep-2008298.008.1817.529.614.0413.401.38Vinod Bhat
DSP US Flexible Equity Fund3-Aug-2012712.0016.6020.5416.31--16.091.23Kedar Karnik, Laukik Bagwe, Jay Kothari
Edelweiss Greater China Equity Off-shore Fund26-Aug-20091,965-19.9324.5118.9315.4519.431.19Bhavesh Jain, Bharat Lahoti
Edelweiss US Value Equity Off-shore Fund7-Aug-201384.0019.7215.8111.08--17.880.91Bhavesh Jain, Bharat Lahoti
Franklin India Feeder Franklin US Opportunities Fund6-Feb-20124,1671.7421.8419.22--18.841.38Sandeep Manam
ICICI Prudential US Bluechip Equity Fund6-Jul-20122,00517.0020.4017.42--16.701.20Rohan Maru, Priyanka Khandelwal
Nippon India US Equity Opportunities Fund23-Jul-2015592.008.5918.4216.81--17.331.18Anju Chhajer, Kinjal Desai
PGIM India Global Equity Opportunities Fund14-May-20101,725-12.0622.6417.4710.5520.581.36Ravi Adukia
Nippon India Japan Equity Fund1-Aug-20142491.5910.889.37--14.900.69Kinjal Desai, Anju Chhajer.
HSBC Brazil Fund1-May-201126-19.18-14.12-4.51-4.6636.28-0.22B Aswin Kumar
Invesco India Feeder - Invesco Pan European Equity Fund1-Jan-20143714.428.826.69--21.900.44Neelesh Dhamnaskar
Edelweiss Europe Dynamic Equity Offshore Fund1-Feb-20141746.0812.407.67--19.250.75Bharat Lahoti, Bhavesh Jain
Franklin India Feeder - Templeton European Oppo. Fund1-May-2014230.500.201.09--20.790.11Sandeep Manam
Axis Global Equity Alpha Fund of Fund1-Sep-20201,41913.47----------Hitesh Das
Edelweiss Asean Equity Offshore Fund1-Jul-201161.002.064.066.718.0620.210.24Bharat Lahoti, Bhavesh Jain
ICICI Pru Global Adv. Fund (FOF)1-Oct-2019254.00-2.70----------Dharmesh Kakkad, Sankaran Naren
PGIM India Global Equity Oppo. Fund1-May-20101,725.00-13.8721.9416.5710.4320.581.36Ravi Adukia
Kotak Global Emerging Market Fund1-Sep-2007148.00-8.5814.0910.348.2716.210.77Arjun Khanna
HSBC Global Emerging Markets Fund1-Mar-200816.00-13.3710.809.826.9418.410.62B. Aswin Kumar
Edelweiss Emerging Markets Oppo. Equity Offshore Fund1-Jul-2014141.00-14.349.4310.37--17.690.56Bharat Lahoti, Bhavesh Jain
PGIM India Emerging Markets Equity Fund1-Sep-2007230.00-22.156.085.036.0419.600.52Ravi Adukia
DSP Global Allocation Fund1-Aug-2014116.00-0.6511.398.15--10.021.12Jay Kothari, Kedar Karnik, Laukik Bagwe

 

Returns (1 Year & 3 Years)

 

*Data as on 21st January 2022

Also, have a look at Best Small Cap Mutual Funds & AMC Profiles,  If you need any assistance on How To Invest In Mutual Funds Feel free to contact Wealth Baba – Financial Planner & Investment Advisor in India. We will try to help you out in the best possible way.

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