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Time for some International Investing ?

Posted By: Admin

How many of us have thought to invest in global stocks like apple, Tesla, Microsoft, Google, Facebook etc. As these stocks are rising and rising. Great investors like Warren Buffett, Peter Lynch, say every minute is a good time to invest in stocks. So we don’t have to worry that we haven’t invested in these stocks till now. We still have time.

We do have a solution to invest in global stocks through mutual funds. Yes you read it right. As we have our own index called Nifty 50 & Sensex. Every country has its own index, for the US it is NASDAQ, Dow Jones. Stocks like apple, Tesla etc. are listed in these indexes. We can invest in all of these stocks through Systematic Investment plan or lump sum by way of Mutual funds. Not only in US stocks, we have options to invest in all global stocks. It is called international funds which will invest in stocks listed outside India. It does have a risk factor; people who can take risk can invest in international funds. We can invest 10 to 20% of our money in international funds, which is a good asset allocation. When the Tech bubble crisis burst in 2000, Sensex lost around 21%, but the US index lost just around 6%. In the 2008 global crisis the Sensex lost 52% but the US market lost just 34%. 

When there was no crisis in 2015 our market was down, the European and Japanese market was up. In 2017 our market witnessed 28% return but China outshone India which gave a return of 36%, so it is better to have a diversification in our portfolio. The added factor in favour of investing in international funds is the rupee depreciation against foreign currency further provides a 4-5% per  annum additional returns to the investors over long periods of time. 

International funds are considered as debt funds in terms of taxation. So when a person is holding less than 3 years it is considered as short term capital gain which will be added to your slab. If a person is holding  the fund for  more than 3 years it is taxed at 20.8% (Including Cess) on the gain along with indexation. 

Past performance of international funds as on 5th February 2021, Source  - Value Research

 

 

Returns (%)

Fund Name

1 year

3 year

5 year

7 year

10 year

DSP Global Allocation Fund

21.73

12.59

10.3

Edelweiss Greater China Equity  Off-shore Fund

82.55

27.63

28.97

20.33

16.92

Nippon India US Equity Opportunities Fund

22.25

21.39

19.27

ICICI Prudential US Bluechip Equity Fund

18.42

19.52

17.53

14.44

DSP US Flexible Equity Fund

25.79

16.6

17.19

13.72

Aditya Birla Sun Life International Equity Fund -Plan A

14.31

13.46

12.6

8.98

10.94

Edelweiss Emerging Markets Opportunities Fund

35.36

13.6

18.96

HSBC Global Consumer Opportunities Fund

18.11

11.97

14.37

Franklin Asian Equity Fund

37.68

14.11

18.25

13.8

11.5

Kotak Global Emerging Market Fund

42.5

12.47

15.08

9.14

9.17

 

So time to consider some exposure to international funds  to diversify your holdings, and investing in some of the finest global companies. 

By : Narayanan

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