I am 34 and have been a regular investor in SIPs of various funds in the Indian large- and mid-cap space, for the past 5 years. I would now like to start investing in funds that give exposure to foreign markets like the US, UK or China and South Asian markets. Can you please suggest some funds that are good investment bets for above criteria? My personal take is that a lot of companies from the US have sound fundamentals and terrific products with brand values (e.g. Apple, Coke, MS, Intel, IBM) – and that investment in them should reap benefits in the long run.
-Kunal
If you have a well-diversified investment in Indian mutual funds, you are right in exploring investments in international funds to diversify your investments. Diversification is a proven strategy to enhance returns on your investments.
There is a wide variety of international funds available to Indian investors. These funds can be broadly classified into three types of funds through which an Indian investor can gain foreign exposure. The first are equity funds which can invest up to 35 per cent in foreign markets such as Templeton India Equity Income, Reliance Natural Resources, Mirae Assets India-China Consumption, ICICI Prudential Indo Asia Equity and Tata Indo Global Infrastructure. Then there is the second set which are called thematic equity funds. These are funds which invest globally such as Birla Sun Life Commodity Equities – Global Agri, DSPBR World Agriculture, DSPBR World Energy, DWS Global Agribusiness Offshore and PineBridge World Gold standard, among others. The third type of funds that are of your interest are geographically-diversified or focussed international funds. You need to be aware that when considering geographical diversification around the globe, diversification is more of a return-optimising tactic – some will rise less and some more. A conscious and planned geographical diversification is available for the thinking investor and is listed in the table. n
This article was originally published on February 25, 2013.
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