Diversification is vital for your portfolio but why diversity only in the Indian markets? Limiting yourself to domestic equity is not ideal as there’s a lot of money to be made from international mutual funds as well. But, that doesn’t mean you take a bag full of cash and start investing in random foreign companies. Chances are that you would not have the required knowledge about overseas companies, their financials, and their long-term outlook.
Without all this, you’d be shooting in the dark, which is never a great idea. What we suggest is that you invest in international mutual funds instead. Leaving your money to managers who know overseas is better than investing the money yourself. Read on as we look at the 4 best international mutual funds to invest in India.
1. DSP Global Allocation Fund
The DSP Global Allocation fund is an open-ended fund of fund scheme that invests predominantly in units of BGF – GAF (BlackRock Global Funds – Global Allocation Fund). The fund also invests in units of similar overseas mutual fund schemes with the aim of generating returns competitive with that of global stocks at lower volatility.
The entire money is invested in stocks, bonds, currencies and cash equivalents over 40 countries and 30 currencies, so there’s great diversification. The fund follows a rigorous investment process with a top-down macro strategy to decide asset allocation and a bottom-up approach for security selection.
2. Nippon India US Equity Opportunities Fund
Nippon India’s domestic mutual funds are extremely popular but its US Equity Opportunities Fund is slowly catching up as well. The fund invests primarily in high quality, high growth stocks listed in the recognised US stock exchanges. The investment strategy followed by the fund is based on the research provided by the Morningstar Investment Advisor India.
One of the methods used by the fund is called the Economic Moats. It is used to describe companies with sustainable competitive advantages that enable them to earn excess returns over a long period of time. The ‘Hare’ strategy of investing is also popular and involves investing in companies experiencing rapid growth with sustainable competitive advantages.
3. ICICI Prudential US Bluechip Equity Fund
As the name suggests, the ICICI Prudential US Bluechip Equity Fund is an equity-focused fund investing in top US companies. The fund invests all the amount in buying equity and equity-linked securities of companies listed on recognised US stock exchanges. As It may, however, invest in GDRs/ADRs issued by the foreign and Indian companies as well.
Most of the fund’s exposure is in securities of large-cap companies included in the S&P 500 index. Coming to the investment strategy, the fund managers of this fund follow a combination of bottom-up and top-down investing approaches without any sector bias.
4. Aditya Birla Sun Life International Equity Fund – Plan A
If you want exposure to all geographies across the world, the Aditya Birla Sun Life International Equity Fund – Plan A is a fund that you’ll like. The fund invests in stocks across the globe with no regional bias, capitalizing on the strengths of individual countries to invest in top-performing stocks even in the markets posting low growth figures.
The fund maintains diversification and avoids concentration risk by containing its sectoral exposure within a particular range of the sectorial weight. The trading strategy features a top-down and bottom-up approach without any market capitalisation or sector bias.