Is investing overseas a good idea?

After a long Durga Puja break, Jai and Veeru decided to meet up at the neighbourhood dosa joint. Jai: How have you been, Veeru? Missed you during these Puja holidays. But I was so glad not to be checking the papers or TV channels and worrying about breaking news. Veeru: Yes, boss! This has been a good month to switch off. First, there was the panic about IL&FS defaulting on bonds and running up Rs 91,000 crore in debt. Many people thought it was a government entity. But now it turns out that it's a strange animal that nobody owns. Then we had the panic about NBFCs finding it difficult to raise money, with their stocks tanking by 30-40 per cent in just a few sessions. Jai: Absolutely! After looking at my portfolio returns in 2018, I am kicking myself for not investing in international funds. Some of these foreign funds are up by 23-24 per cent in one year. But my Indian multi-cap funds are down by 6 per cent in the same period. Don't even ask about small- and mid-cap funds! Veeru: That's unfair, Jai. You are comparing one of the worst times for the Indian market and the rupee with a great time for the US market and the dollar. Had you checked on January 1st this year, Indian multi-cap funds had a 40-50 per cent return, but even the best international funds had one-year gains of 16-17 per cent. These international funds make money when the rupee depreciates and the rupee's down by 13 per cent against the dollar this year. Jai: I get your

This article was originally published on December 20, 2018.