InvestorQ : Why are mutual funds looking at global diversification in their portfolio?
Dilmini Mercia made post

Why are mutual funds looking at global diversification in their portfolio?

Answer
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Dawn Cherian answered.
2 weeks ago


That appears to be the latest trend as domestic funds are increasing veering towards launch of global and international funds. This not only offers diversification to investors but also has been one of the best performing asset classes in the last few years.

Very recently, Edelweiss Asset Management in partnership with MSCI launched the Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund. This is a thematic Fund of Funds that will invest in global healthcare companies with the NFO closing on 20 Oct.

Of course, it will still be predominantly an Indian healthcare fund with almost 70% exposure to India. However, the 30% will be allocated to about 20 stocks listed in the US, comprising the top five stocks across pharma, healthcare equipment, biotechnology and life sciences.

Some of the top holdings of the underlying fund include Apollo Hospitals, Cipla, Dr Reddy’s Laboratories, Jubilant Life science, Biocon, and Pfizer. The idea is provide investors with an easy and low-cost access to promising healthcare companies in India and globally.

Others like Principal Asset Management are already in the fray with a 85:15 mix between Indian healthcare and global healthcare firms. The fund expects that this type of global asset allocation would be best poised to enhance risk adjusted returns for investors.