Internationally Unsuitable

Whenever the rupee weakens, the thoughts of mutual fund investors start drifting towards international funds. Right now, if you were to spend a few minutes rooting around the research tools available on Value Research Online, you would find it hard to ignore international funds. Currently, there are a set of international funds whose returns over the last month are up around 8 to 10 per cent. The top performing fund is Motilal Oswal Mutual Fund’s MoST NASDAQ-100 ETF, which is an index fund based on the NASDAQ and has gained 16 per cent over a month. This at a time when most normal Indian mutual funds are languishing with returns of 3 to 5 per cent over the same period. However, even if you take one short step beyond the obvious, you’ll realise that the magic of international funds is actually the magic of exchange rates. The returns t

This article was originally published on September 26, 2011.