I have gone through your article titled 'Profiting from International Equity'. On the basis of this article, I have identified Franklin India Feeder-Franklin US Opportunities Fund to invest in. Is this a good choice or would you suggest any other fund?
- Arvind Agarwal
The fund that you have chosen is a good fund for international diversification. Alternatively, you can also consider Motilal Oswal Nasdaq 100 FOF. But your choice is also good and you can go right ahead with that.
More broadly, when we talk about international diversification, an investor should take into consideration two-three dimensions. Apart from getting international diversification, one should invest internationally to get exposure to fundamentally strong and growing companies, which are otherwise not available to Indian investors in the domestic market. By investing internationally, one gets exposure to companies which have a fairly global and diversified business. So, you will get true global diversification.
And the other thing is the foreign exchange. One should ideally go for geographies or currencies which provide a currency tailwind. So, whatever gains you make on your investments, do not get squared off because of adverse currency movements. If you look at these funds and the kind of stocks they invest in, they tick all these boxes. That is why these are compelling options for international diversification.