International Mutual Fund: Equity International funds also gave high returns to investors in the Corona crisis. The average returns of international mutual funds have been more than 47 per cent during the last 1 year, while the long-term returns in this segment have also been excellent. In the case of returns, there are many schemes of this category in the top funds. International funds or overseas fund funds invest in international equity markets. The investment of these funds is mainly in equity. If you also want to keep the balance by diversifying your investment, then you can include the International Fund in the portfolio. However, investors should invest only 8 to 10 percent of their total portfolio in these funds.
What are international funds?
International funds or overseas fund funds invest in international markets. These funds can be invested in equity or debt. They also invest in other asset classes such as commodities, real estate etc. According to SEBI regulations, mutual funds that invest more than 80 per cent in equity or equity related instruments of other countries fall in the category of international funds. Apart from giving an opportunity to invest in the global market, these funds also help in achieving geographical diversification and sometimes act as a hedge if there is a decline in domestic currency.
Top Returning Funds in 3 Years
PGIM India Global Equity Opportunity Fund
3-Year Return: 33%
Value of 1 lakh in 3 years: 2.36 lakhs
Launch Date: 1 January 2013
Return since launch: 12.55%
Asset: 865 Crore (March 31, 2021)
Franklin India Feeder Franklin US Opportunity Fund
3-Year Return: 26.84%
Value of 1 Lakh in 3 years: 2.04 Lakh
Launch Date: 2 January 2013
Return since launch: 21.49%
Asset: 2890 Crore (March 31, 2021)
Edelweiss Greater China Equity of Shore Fund
3-Year Return: 26.56%
Value of 1 lakh in 3 years: 2.03 lakh
Launch Date: 1 January 2013
Return since launch: 18.75%
Asset: 1272 crores (March 31, 2021)
Nippon India US Equity Opportunity Fund
3-Year Return: 26.20%
Value of 1 lakh in 3 years: 2.01 lakh
Launch Date: 23 July 2015
Return since launch: 18.34%
Asset: 337 Crore (March 31, 2021)
(source: value research)
Investment method
Some international funds invest directly in international equities. At the same time, there are some funds that invest in international index such as Nasdaq or S&P 500. There are also some who act as feeder funds and invest in an identifiable mutual fund in the international market. Then there are the Fund of Funds which invest in units of International Funds.
Keep these things in mind
If you have invested money in the equity market of a country, then any negative issue in that country may affect your investment. Therefore, before investing money, gather information about the risk associated with the country associated with the fund. The movement in the currency has an impact on their returns. For example, if the rupee is strong then the returns of these funds may decrease. At the same time, their returns can increase due to the weakening of the rupee. The applicable NAV comes after one day, there is the risk of currency, if kept for less than three years, long term capital gains tax is levied.
(Note: BPN based on discussions with Fincap Director AK Nigam)
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