Ask Value Research

Currency Impact on Funds

Currency rate fluctuations do impact international funds, but that is not why you should invest in them…

I was planning to invest around 5-10 per cent of my portfolio in special international-related funds like ING Global Real Estate, Birla Sun Life International Equity as well as Birla Sun Life Commodities Equity fund. Do these funds have the currency- or exchange rate-related risks?
-Jayantilal Gosar

The reason why one should be investing in such funds is to diversify, not to play on the currency. Of course, the depreciating rupee has made these funds look impressive and they are favourably placed right now. But at the same time, an appreciating rupee can have an opposite effect on their performance.

This article was originally published on May 15, 2012.

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