InvestorQ : Can I invest in international markets through Indian mutual funds?
Samita Patil made post

Can I invest in international markets through Indian mutual funds?

4 years ago

Yes, you can invest in international markets through Indian mutual funds. Global markets are primarily divided in to emerging/developing and developed economies. High Net worth Individuals (HNIs) and Foreign Institutional Investors (FIIs) are always scouting for good investment opportunities across the globe. With the help of mutual funds, even you can invest in global markets and make the most of the global equity rally. 

What are global funds?

A global fund is a mutual fund whose primary objective is to invest in companies across the globe. The fund manager diversifies the portfolio by investing in companies located in different parts of the world. However, a global fund has mandate to invest in the domestic country as well.

For example, a global mutual fund from India can invest in companies from US, UK, Japan, China and India.

Salient features of global funds - Global exposure – Global funds allows you to diversify your portfolio by investing in different stocks of different countries, providing global exposure to your portfolio. - Risk diversification – Every country has different set of policies and market conditions. A diversified portfolio will help to reduce the risk factor of your overall portfolio, but one should keep in mind that changes in country specific policies can adversely impact a fund. - Hedge – A global fund will also work as a hedge against inflation - Returns – Global funds are primarily suitable for long term investors and can give good returns in the long run. The returns offered by a global fund could vary based on multiple parameters. - Currency – One should also keep in mind that global funds are exposed to currency fluctuations and it can impact the performance of global fund.