Exploring International Mutual Funds in India
International mutual funds are an excellent option for investors looking to diversify their portfolios and gain exposure to global markets. These funds allow investors to benefit from international economic trends and opportunities. In this blog, we will explore two types of international mutual funds: global funds and fund of funds investing overseas. We will discuss their characteristics and suitability for different types of investors.
Global Funds
What Are Global Funds?
Global funds are mutual funds that invest directly in international markets. These funds purchase securities from various countries, offering investors exposure to global economic trends and opportunities. Global funds can invest in a mix of equities, bonds, and other assets across multiple countries.
Characteristics
- Diversification: Global funds provide diversification by investing in a range of international securities, reducing the risk associated with investing in a single market.
- Exposure to Global Growth: These funds offer exposure to the growth potential of various economies around the world, allowing investors to benefit from global economic trends.
- Currency Risk: Investing in global funds involves currency risk, as changes in exchange rates can impact returns.
Suitability
Global funds are suitable for investors looking to diversify their portfolios and gain exposure to international markets. They are ideal for those who want to benefit from global economic growth and are willing to accept the associated risks.
Example: If you want to invest in leading companies from around the world, the Franklin India Feeder – Franklin U.S. Opportunities Fund could be a good option. This fund invests in U.S. companies and offers exposure to one of the largest and most dynamic markets in the world.
Fund of Funds Investing Overseas
What Are Fund of Funds Investing Overseas?
Fund of Funds (FoFs) investing overseas are mutual funds that invest in other mutual funds domiciled in foreign countries. Instead of directly purchasing international securities, these FoFs invest in global mutual funds managed by international fund houses.
Characteristics
- Access to Global Markets: FoFs provide access to global markets by investing in mutual funds that are managed by international experts with local market knowledge.
- Diversification: These funds offer diversification across different geographies, sectors, and asset classes by investing in multiple international mutual funds.
- Professional Management: FoFs benefit from the expertise of multiple fund managers, each specializing in different markets and investment strategies.
Suitability
FoFs investing overseas are suitable for investors seeking global diversification without the need to directly select international securities or funds. They are ideal for those who prefer a professionally managed, diversified approach to global investing.
Example: If you want a diversified investment that includes exposure to various international markets, the ICICI Prudential Global Stable Equity Fund (FoF) could be a good option. This fund invests in a mix of international mutual funds, providing broad global exposure.
Conclusion
International mutual funds in India offer a range of options for investors looking to diversify their portfolios and gain exposure to global markets. Global funds provide direct investment in international securities, offering the potential for global growth and diversification. Fund of funds investing overseas offer a professionally managed, diversified approach by investing in international mutual funds. By understanding these categories, you can choose the right international mutual fund that aligns with your investment objectives.
Disclaimer: This blog is for educational purposes only and does not constitute investment advice. Please consult with a financial advisor before making any investment decisions.
