International mutual funds are a type of mutual fund that invest in companies that are not listed on India’s stock exchange. These funds invest in equity and equity-related instruments of top-performing international companies. All fund-of-fund schemes are considered as international mutual funds. If you want to diversify your investment portfolio and invest in international mutual funds, here’s a list of the best international mutual funds in India in 2023.
Here are the best international mutual funds 2023 in India that you can invest:
|S No.||Name of the Mutual Funds||5-Year Annualised Returns|
|1.||DSP World Mining Fund- Direct-Growth||16.20%|
|2.||Kotak Multi Asset Allocator Fund of Fund- Dynamic- Direct-Growth||15.30%|
|3.||ICICI Prudential US Bluechip Equity Fund- Direct-Growth||15.70%|
|4.||ICICI Prudential Thematic Advantage Fund (FoF)- Direct-Growth||14.60%|
|5.||DSP US Flexible Equity Fund- Direct-Growth||14.70%|
|6.||Nippon India US Equity Opportunities Fund Direct Plan Growth||13.60%|
|7.||PGIM India Global Equity Opportunities Fund- Direct-Growth||15%|
|8.||Franklin India Feeder Franklin US Opportunities Fund- Direct-Growth||12.80%|
|9.||Edelweiss Greater China Equity Off-shore Fund- Direct-Growth||7.90%|
|10.||Aditya Birla Sun Life Global Emerging Opportunities Fund- Direct-Growth||9%|
If you want to invest in and capture the high returns potential of international markets in a cost-effective, transparent, and simple manner, you could also consider the Navi NASDAQ 100 Fund of Fund and the Navi US Total Stock Market Fund of Fund. Investment starts at just ₹10.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Now, let us take a look at the best-performing international mutual funds in India:
Often considered to be one of the best international mutual funds, the DSP World Mining Fund was launched on January 1, 2013, and invests majorly in financial sectors. Its expense ratio may be slightly higher than similar funds in the same category. An important factor that investors may want to consider about DSP World Mining Fund is that it has yielded 17.94% p.a. on a 3-year trailing basis. Given below are crucial details:
Often considered to be among the top-performing international mutual funds, Kotak Multi Asset Allocator Fund of Fund was launched on January 9, 2013. Currently, it invests 53.8% in equities, 23.2% in debt, and the remaining portion is held as cash. In terms of sectoral allocation, Kotak Multi Asset Allocator Fund of Funds invests 100% equities and about 98.7% debt in the financial sector. Given below are more details:
This scheme was launched on January 2, 2013 and aims to generate long-term capital appreciation by investing in equities and equity-linked securities. To be precise, it invests in companies listed on recognised stock exchanges in the United States of America. Most of its investments are in technology, healthcare, capital goods and financial sectors. Provided below are its details:
Based on several parameters, the ICICI Prudential Thematic Advantage Fund (FoF) could be one of the best fund of funds in India. It was launched on April 4, 2013. Currently, it invests 85% of the corpus in equity and 6.8% in debt. The remaining is currently held as cash or cash receivables. The scheme aims to provide long-term capital appreciation by investing in various thematic/sectoral funds. For more details, take a look below:
DSP US Flexible Equity Fund was launched on January 1, 2013. It is a feeder fund for Black Rock Global Funds- US Flexible Equity Fund. It currently invests 98.8% of the corpus in equities, of which 100% is invested in the financial sector. When it comes to asset allocation, this international mutual fund currently holds 1.2% of its assets in cash. More details are as follows:
This international mutual fund was launched on July 23, 2015, and currently invests 99.6% in equities. When it comes to sector-wise asset allocation, the scheme invests in services, technology, finance, healthcare, and energy-related companies among others. Since its inception, this fund has been able to double its investments every 6 years. Given below are its details:
This scheme was officially launched on January 8, 2013, and it is considered to be a medium-sized fund in its category. Its expense ratio is 1.43% at present. Like many other international funds, most of its investments are in one fund- PGIM Jennison Global Equity Opportunities Fund. Take a look at its details:
This scheme was officially launched on January 2, 2013, and since then, it has delivered -12.16% average annual returns. Like some other funds in the same category, it invests primarily in Franklin US Opportunities Fund, a global fund that invests mostly in US stocks. Take a look at its details:
This scheme was officially launched on January 2, 2013, and invests mostly in the financial sector. It aims to provide long-term capital appreciation from companies located in the Greater China region. For this purpose, it invests in JPMorgan Funds- Greater China Fund. Provided below are more details:
This scheme was launched on January 3, 2013. The global fund that this scheme primarily invests in is the Julius Baer Equity Next Generation Fund. The fund currently invests 98.9% in equities and holds the remaining corpus as cash. Take a look at the important details of the fund:
*Data correct as of 31st March, 2023
Disclaimer: Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
The process of investing in international mutual funds is similar to equity fund investment. The investment amount is in rupees and in return, investors receive mutual fund units. The fund manager allocates the investment amount as per the fund’s objective. Generally, the amount gets invested in equities of companies listed on stock exchanges abroad.
There are primarily two ways in which fund managers invest in equities abroad:
Having international affiliations was the underlying concept with which international mutual funds began operating. For example, DSP offers units of Blackrock Funds to Indian mutual fund investors, while Franklin Templeton offers its own international fund via an Indian fund of funds.
These funds allow investors from any country, including their home country to invest. These funds invest in companies worldwide across various asset classes for better diversification.
These are country-specific funds that invest in companies of a specific country or region. For example, a regional fund can invest in US stocks or top European companies only.
A country fund invests in stocks of a specific country, for example, the US or China. This makes it easy for fund managers to study and analyse the particular market in a better way.
Such funds follow a theme-based investment approach investing in the overseas stocks of a specific theme/sector. For example, an international mutual fund with an infrastructure theme will invest in shares of foreign steel, cement and power companies.
These work well for investors looking to invest in a particular precious commodity. International mineral funds and gold funds are examples of this type of mutual fund.
Listed below are the steps you need to follow to invest in the best international mutual funds in India:
Decide on your investment goals and assess your risk appetite.
Consult a financial expert, if required, to find out which international scheme is most aligned with your financial goals and risk-taking capacity.
You can invest in the chosen scheme by visiting the official website of the fund house.
Register online on the AMC’s official website, navigate to the ‘mutual funds’ section and select the scheme.
Choose the investment mode, enter the amount and click on ‘Proceed’.
Fill up the form with your KYC and details of your PAN and bank account
Deposit the initial investment amount to initiate your investment.
The following are some of the advantages of investing in international funds:
By diversifying your investments globally, you get the benefits of markets not correlated to India. When the Indian economy is struggling, you can get better returns from foreign markets.
Some of the global market leaders, such as Google, Microsoft, Apple, Facebook and Amazon, etc., are located on foreign stock exchanges. If you want to invest in these brands, international funds can be a suitable option.
When investing in international funds, you get exposure to foreign currency by investing in rupees. Any appreciation in the value of the foreign currency against the rupee would increase your returns.
Exposure to different economies lets you capitalise on gains while balancing risk. It also reduces the overall volatility of your portfolio as losses from one region are covered by gains from others.
Investing in global markets can carry unpredictable risks. Political turmoil, economic downturns and changes in policies can take a toll on your investment. Hence, investors may want to check their risk appetite before considering such investments.
Different international funds have their unique strategies for constructing a portfolio. Some funds may invest in Indian and foreign equity, while others may invest in a particular theme or sector. Investors may want to check if the asset allocation is in line with their financial goals.
All Asset Management Companies (AMCs) charge a fee called expense ratio to cover their administrative and operating expenses. When choosing an international mutual fund, it is vital that you check its expense ratio and compare it with the expense ratio of other funds in the same category. This is because the expense ratio has an impact on the returns you earn.
The fund manager needs to have in-depth knowledge and expertise about the global markets for these mutual fund schemes. Hence, it is important for investors to check their experience in managing similar funds and their performance before choosing a fund.
Although international mutual funds invest primarily in stocks, they are an anomaly when it comes to taxation. Returns from these investments are taxed as non-equity funds.
For a holding period of less than three years, short-term capital gains (STCG) are added to your gross income and taxed as per the income tax slab. For a holding period of over 3 years, long-term capital gains (LTCG) tax is applicable at a 20% rate after indexation.
International mutual funds give a wide range of choice to Indian investors to invest in various global companies. Investors can use them to benefit from booming markets in other countries. However, always consider your investment goals and risk appetite before choosing the best international mutual fund 2023.
In case you are worried about the risks of investing in international funds, you can always start small with Navi’s international mutual fund schemes like US Total Stock Market Fund of Fund or NASDAQ 100. With Navi Mutual Fund, you can start investing with as low as Rs.10!
The investment horizon of an individual is completely dependent upon his/her financial goals. That said, one might want to have a long term investment horizon to protect their finances from the volatility of equity markets. Furthermore, staying invested for the long term allows you to benefit from the power of compounding.
Net Asset Value (NAV) is the per-unit market value of all assets held by a mutual fund scheme. To calculate this, you have to add the market value of all securities and subtract all liabilities and expenses. Then, you need to divide the figure by the total number of outstanding units.
Here are some tips to follow for investing in international funds:
• Have thorough knowledge of the market
• Do your research regarding the credit risk, default risk, and fund allocation
• Read the offer documents carefully
• Choose a country with strong legal systems and stable markets
Yes, you can invest in international mutual funds in India as quite a few reputed fund houses offer international funds to investors. Moreover, the international market offers Indians a wide range of investment options ranging from funds of funds (FoF) and sectoral funds to ETFs.
International mutual funds are a good investment option for Indian investors who already have a well-diversified portfolio of Indian stocks. They can consider international schemes for further diversification as they would be able to generate good returns. It is also a good investment option for investors who wish to invest in global companies to make profits from international markets.
International mutual funds fall under the purview of the Securities and Exchange Board of India (SEBI) which makes them safe and secure from fraud or malpractice. Moreover, these schemes offer the benefit of geographical diversification which reduces risks associated with domestic markets. However, like any other equity investments, international funds also carry certain degrees of risk. But as an investor, you can mitigate this risk through long-term investments and a diversified portfolio.
Some of the best international mutual funds in India are as follows:
1. DSP World Mining Fund
2. Kotak Multi Asset Allocator Fund of Fund
3. ICICI Prudential US Bluechip Equity Fund
4. ICICI Prudential Thematic Advantage Fund (FoF)
5. DSP US Flexible Equity Fund
The answer to this depends on an investor’s risk appetite and investment goals. As a beginner, you can start investing in international funds with Navi Mutual Fund at just Rs.10!
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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