If you thought only international mutual funds could invest in foreign stocks, think again. Even other 'India-based' equity mutual funds can do so, but they don't exceed the 35 per cent-limit to ensure they enjoy better tax benefits than international funds.
Hence, we have compiled a list of the top-five desi funds (out of a total 21) with the highest average international allocation over the last five years.
- DSP Value Fund
This desi fund undertakes a unique approach when it comes to international investing. Unlike peers, it only makes investments in foreign mutual funds and shares of Warren Buffett-led Berkshire Hathaway.
- Parag Parikh Flexi Cap Fund
This is the most unique fund on the list, owing to the longevity of its investment in foreign securities. Since its launch in 2013, it has maintained an average allocation of 25 per cent towards foreign securities.
- Axis Growth Opportunities Fund
While this fund is required to invest 35 per cent each in large-caps and mid-caps, it has the freedom to invest the remaining 30 per cent elsewhere. And it chooses to do so in foreign securities.
- SBI Focused Equity Fund
The flexi-cap fund sticks to investing in technology giants listed on the NASDAQ.
- ICICI Prudential Value Discovery Fund
This two-decade-old fund ventured into international investing for the first time in July 2021.
Things to remember
However, before you sign off, here are a few things you need to know.
- Currently, these funds are sporadically investing in foreign stocks, but not in a very active way. Heck, even the pure-play international funds have restrictions due to certain investment limits placed by SEBI. To know more about it, read this story.
- These funds are not a recommendation. It's simply a list of India-based equity funds that invest overseas.
- The above graphs show that all these funds' international allocation has dipped in recent months. That's not their doing, though. It's simply a combination of the SEBI restriction on foreign investing and their investment growth in the meantime.
Also read: Four flexi-cap funds in disguise
