For investing outside the Indian market you can choose the International or Global Mutual Fund category.

These funds add an element of geographical diversification to the manifold mutual fund types currently exist in the Indian mutual fund sector.

Through this article, I will cover everything you need to know about international funds and the top 5 funds you can consider to invest in 2019. Read on.

What Is An International Fund?

International Fund is a type of mutual fund, which invests in companies located anywhere in the world. In this fund, the accumulated money will be in stock markets of other countries like the USA, Brazil, etc.

Investing in these mutual funds may mean more risk exposure, but also chances of higher returns. People usually prefer it as an alternative for long-term investment.

With Indians getting increasingly aware of investment options around the world, the need for portfolio diversification is greater than ever. A diverse plan not only spreads the risks but also tap the earning potential of different markets.

The mutual fund houses in India are coming up with innovative schemes across market types, sectors and risk classes, with more experimental investors entering the playground.

5 Most Popular International Funds

Here is the list of top 5 International funds that you can consider investing in.

1. Franklin India Feeder Franklin US Opportunities Direct Fund-Growth

This international fund launched on January 02, 2013. It is a fund with high risk and has given a return of 15% since its launch.

Returns per annum over the years from this fund are :

DurationReturns
1 year 8.72%
3 years 18.33%
5 years 14.25%

Key information of this fund:

Launch Date02 January 2013
Fund CategoryEquity – International
Plan TypeDirect
Rating by Groww2 Star
AUM (Fund Size)Rs. 889 Cr
RiskometerHigh
Minimum SIPRs. 500
Minimum SWPRs. 1000
BenchmarkRussell 3000 Growth
Age of the fund6 years old
Expense Ratio0.69%
Exit LoadIf redeemed between 0 Year to 3 Year; Exit Load is 1%;
Type Open-ended

The investment objective of the fund is to provide capital appreciation by investing predominantly in units of Franklin U. S. Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the United States of America.

It is one of the great international funds which has given attractive returns of 8.72%, 18.33% and 14.25% over the last 1 year, 3 year and 5 year periods respectively.

However, it has not succeeded in outperforming its benchmark over any of these tenures.

As on January 31st, 2019, the scheme operates as a fund-of-fund and has invested 99.88% of its assets in the Franklin US Opportunities Fund and the remaining 0.12% in cash and debt instruments.

2. ICICI Prudential US Bluechip Equity Direct Plan-Growth

This international fund launched on January 2, 2013. It is a fund with high risk and has given a return of 16.21% since its launch.

Returns per annum over the years from this fund are :

DurationReturns
1 year  9.21%
3 years 13.57%
5 years 11.77%

Key information of this fund:

Launch Date01 January 2013
Fund CategoryEquity – International
Plan TypeDirect
Rating by Groww2 Star
AUM (Fund Size)Rs. 290 Cr
RiskometerHigh
Minimum SIPRs. 100
Minimum SWPRs. 500
BenchmarkS&P 500 TRI
Age of the fund6 years old
Expense Ratio1.10%
Exit LoadIf redeemed within 1 month; Exit Load is 1%;
Type Open-ended

The investment objective of the fund is to provide long term capital appreciation to investors by primarily investing in equity and equity-related securities (including ADRs/GDRs issued by Indian and foreign companies) of companies listed on the New York Stock Exchange (NYSE) and/or NASDAQ.

This is a relatively recent addition to the international fund’s category.

However, even in this relatively short span of time, the scheme has succeeded in emerging as one of the best international funds in India.

It outperformed its benchmark over the last 1 year period by generating returns of 9.21% and also generated significantly high returns during the last 3 year at a rate of 14.69% p.a and 5 years at 11.34% p.a as well.

As on January 31st, 2019, this scheme has invested 96.93% of its assets in US equities and the balance 3.07% in debt and cash instruments.

It has given maximum weight-age to the consumer non-durables sector (around 20%) in its portfolio, followed by software (around 13%) and healthcare services (around 10%).

3. DHFL Pramerica Global Equity Opportunities Fund Direct-Growth

This international fund launched on January 8, 2013. It is a fund with high risk and has given a return of 5.32% since its launch.

Returns per annum over the years from this fund are :

DurationReturns
1 year 18.77%
3 years 13.20%
5 years 4.29%

Key information of this fund:

Launch Date08 January 2013
Fund CategoryEquity – International
Plan TypeDirect
Rating by Groww1 Star
AUM (Fund Size)Rs. 18 Cr
RiskometerHigh
Minimum SIPRs. 500
Minimum SWPRs. 100
BenchmarkMSCI All Country World TRI
Age of the fund6 years old
Expense Ratio0.67%
Exit LoadIf redeemed within 1 year; Exit Load is 1%;
Type Open-ended

The investment objective of the fund is to generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.

But remember, there can be no assurance that the investment objective of the Scheme will be realized.

In the past 3 years, this fund has performed tremendously well as compared to its peers. But if we look into its 5-year performance, it is much below its peers and benchmark.

4. DSP US Flexible Equity Direct Plan-Growth

This international fund launched on January 03, 2013. It is a fund with high risk and has given a return of 14.74% since its launch.

Returns per annum over the years from this fund are :

DurationReturns
1 year 18.77%
3 years 13.20%
5 years 4.29%

Key information of this fund:

Launch Date03 January 2013
Fund CategoryEquity – International
Plan TypeDirect
Rating by Groww1 Star
AUM (Fund Size)Rs. 228 Cr
RiskometerHigh
Minimum SIPRs. 500
Minimum SWPRs. 500
BenchmarkRussell 1000
Age of the fund6 years old
Expense Ratio1.68%
Exit LoadNIL
Type Open-ended

The primary investment objective of this scheme is to seek capital appreciation by investing predominantly in units of BlackRock Global Funds US Flexible Equity Fund (BGF – USFEF).

The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus.

The Scheme may also invest a certain portion of its corpus in money market securities and/ or money market/liquid schemes of DSP BlackRock Mutual Fund, in order to meet liquidity requirements from time to time.

But remember, there is no assurance that the investment objective of the scheme will be realized.

As on 31st January 2019, following a fund-of-fund investment strategy, this international fund has invested 94.82% of its assets in BlackRock Global Funds – US Flexible Equity Fund.

The top 3 company holdings of the scheme’s underlying fund are:-

  • Apple: 5.3%
  • Alphabet: 5.2%
  • Microsoft: 5.2%

5. Kotak Global Emerging Market Fund Direct-Growth

This international fund launched on January 04, 2013. It is a fund with high risk and has given a return of 4.57% since its launch.

Returns per annum over the years from this fund are :

DurationReturns
1 year – 2.33%
3 years 8.13%
5 years 2.43%

Key information of this fund:

Launch Date04 January 2013
Fund CategoryEquity – International
Plan TypeDirect
Rating by Groww1 Star
AUM (Fund Size)Rs. 33 Cr
RiskometerHigh
Minimum SIPRs. 1000
Minimum SWPRs. 1000
BenchmarkMSCI Emerging Markets
Age of the fund6 years old
Expense Ratio0.69%
Exit LoadNIL
Type Open-ended

The investment objective of this scheme is to provide long-term capital appreciation by investing in an overseas mutual fund scheme that invests in a diversified portfolio of securities as prescribed by SEBI from time to time in global emerging markets.

Why Should You Consider Investing In International Funds? 

Here are a couple of advantages of investing in these International funds.

1. Geographic Diversification

One country can never top the growth charts consistently. so even if you don’t have a chance this year, there is one, the next year.

At a macroeconomic level, most countries have their own economic cycle.

Hence, by spreading your money among different countries, you achieve diversification and hedging risk by spreading it across a mix of assets and markets.

2. International Exposure Under Expert Management

You may not have adequate knowledge about the foreign country’s economy and the industry there. Here, a qualified intermediary like mutual fund AMC can assist.

Therefore, you can gain exposure to the global market even if you are not familiar with it.

3. Scope For Better Market Returns

By capitalizing on multiple economies or markets simultaneously, your portfolio can fetch higher returns. Aside from mitigating risks by diversifying, overseas investing also boost your portfolio quality.

But these all advantages come with a fair amount of risks. Here are some of the risk associated with International funds:

  • There is a risk of volatility in currency exchange rates.
  • In the case of an international mutual fund, you may find it difficult to get information on how the companies linked with those funds are performing, are there any regulatory or change in business plan happening, etc.
  • The upcoming markets can be affected by the economic and political changes of those countries.

If you wish to invest in international funds, research well before investing as well as during the term of holding the investment.

Happy Investing!

Disclaimer: The views expressed here are that of the author and do not reflect those of Groww. 

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