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5 Best International Equity Mutual Funds In India

Olga Robert

International equity mutual funds enable Indians to invest in stocks of companies listed abroad. Through these funds managed by experts, you will be able to reap gains from stocks of some of the biggest companies in the world like Apple Inc, Google and Facebook.

How do these work?

International mutual funds can either invest directly in foreign stocks or in indices like Nasdaq or S&P 500.

You can also invest in "feeder funds" which will invest your money in an existing identified mutual fund in the international market.

Further, there are "fund of funds" that invest in different units of mutual funds in the international market.

These could be additionally differentiated based on the markets and type of assets they invest in. For example, some mutual funds only invest in US markets while others invest in emerging markets.

These equity-based funds may also be investing a small percentage in debt instruments to balance risk.

Advantages of investing in international mutual funds

You can take your "diversification of investment portfolio" to another level with SIPs in international mutual funds.

Countries and geographies around the world face different challenges and experience growth at varying levels. To balance risks of investing only in Indian companies, you can take the opportunity to put money in an economy that is doing well at any given time.

Whenever the rupee depreciates or the US dollar strengthens, you stand to enhance your returns from investments in the foreign markets.

However, note that the profits you make from investments in international funds are taxed like debt funds in India.

5 best international equity mutual funds

The following mutual funds are being ranked based on their 5-year returns on SIPs (Systematic Investment Plan) with Rs 10,000 per month investment.

Notably a few have performed better in the short-term, however, like with all equity-linked investments, it is wise to have long investment horizon as markets are highly unpredictable.

Further, it is advisable to make only a small allocation of your total portfolio in these funds to reduce risk. You can invest as little as Rs 100 per month through SIP or Rs 5,000 in lumpsum.

Consult a professional adviser to make the right investment decisions based on your income and financial goals.

1. Franklin India Feeder Franklin US Opportunities Fund

This fund invests predominantly in units of Franklin US Opportunities Fund, which is an overseas Franklin Templeton mutual fund, that primarily invests in small, medium and large cap American companies with strong growth potential across a wide range of sectors.

On Rs 10,000 monthly SIP Total Investment (Rs) Profit (Rs) Value of Investment (Rs) Absolute return
1 year return 1.2 lakh 19,108 1.39 lakh 15.92%
3 year return 3.6 lakh 1.35 lakh 4.95 lakh 21.84%
5 year return 6 lakh 3.45 lakh 9.45 lakh 18.22%

2. ICICI Prudential US Bluechip Equity Fund

The ICICI Prudential US Bluechip Equity Fund invests in equity and equity-related securities of companies listed on recognized stock exchanges in the US. The scheme shall also invest in ADRs/GDRs issued by Indian and foreign companies.

On Rs 10,000 monthly SIP Total Investment (Rs) Profit (Rs) Value of Investment (Rs) Absolute return
1 year return 1.2 lakh 19,659 1.4 lakh 16.38%
3 year return 3.6 lakh 1.29 lakh 4.89 lakh 20.96%
5 year return 6 lakh 3.33 lakh 9.33 lakh 17.70%

3. Edelweiss Greater China Equity Off-shore Fund

This Edelweiss Mutual Fund invests in a JP Morgan Fund -JF Greater China Equity Fund, which invests primarily in a diversified portfolio of companies incorporated or which have their registered office located in, or derive the predominant part of their economic activity from a country in the Greater China region.

On Rs 10,000 monthly SIP Total Investment (Rs) Profit (Rs) Value of Investment (Rs) Absolute return
1 year return 1.2 lakh 24,163 1.44 lakh 20.14%
3 year return 3.6 lakh 1.22 lakh 4.72 lakh 18.36%
5 year return 6 lakh 3.02 lakh 9.02 lakh 16.34%

4. PGIM India Global Equity Opportunities Fund

This scheme invests predominantly in units of overseas mutual funds which focus on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.

On Rs 10,000 monthly SIP Total Investment (Rs) Profit (Rs) Value of Investment (Rs) Absolute return
1 year return 1.2 lakh 19,423 1.39 lakh 16.19%
3 year return 3.6 lakh 1.27 lakh 4.87 lakh 20.69%
5 year return 6 lakh 2.65 lakh 8.65 lakh 14.62%

5. DSP US Flexible Equity Fund

It invests predominantly in units of BlackRock Global Funds US Flexible Equity Fund (BGF - USFEF). The scheme may also invest in units of other similar overseas mutual fund schemes. Up to 5 percent of capital could be invested in debt and money market instruments.

On Rs 10,000 monthly SIP Total Investment (Rs) Profit (Rs) Value of Investment (Rs) Absolute return
1 year return 1.2 lakh 14,696 1.35 lakh 12.25%
3 year return 3.6 lakh 89,848 4.5 lakh 15.03%
5 year return 6 lakh 2.56 lakh 8.56 lakh 14.21%

Note: The data is as of 23 January 2020 from ETMoney. Mutual fund investments are subject to market risks and may not replicate results seen in the past year.

Disclaimer
The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.

About the author
Olga Robert has been covering equity markets and personal finance for over two years.

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