International Mutual Funds are those funds which invest in financial assets of countries, other than the ones in which the investor resides. These international mutual funds invest either in equity, debt, or in other asset classes such as commodities, real estate and gold.

As people are getting extensively aware of the opportunities available in the international markets, portfolio diversification has become the need of the hour. Portfolio diversification helps in decreasing risk and helps to tap on potential gains that are available in this form of investment.

Why Invest in International Mutual Fund?

1.Diversify your portfolio 

2. Safeguard your returns when the domestic market is under-performing

 

Apart from that if your interest lies in specific areas such as stocks of technology, automobile, etc. there are some excellent options available in the US and European Markets like Apple, Microsoft, etc. Let’s have a look at some of the mutual funds that invest in international stocks.

Invest in International Stocks Through These Funds
Fund Name 1Y 3Y 5Y Expense Ratio Turnover Ratio Category Risk
Parag Parikh Long Term Equity Fund Direct Growth -3.22% 11% 11.62% 1.33% 229% Equity
(Multi Cap)
Moderately High
ICICI Prudential US Bluechip Equity Direct Plan Growth 7.6% 13.57% 11.86% 1.6% 65% Equity
(Sectoral/Thematic)
High
DSP US Flexible Equity Direct Plan Growth -0.55% 13.23% 10.92% 1.68% NA Others
(FoF Overseas)
High
Aditya Birla Sun Life International Equity Fund Plan A Direct Growth 3.84% 11.89% 7.28% 2.22% 26% Equity
(Sectoral/Thematic)
High

1. Parag Parikh Long Term Equity Fund

Key Information

Launch Date 24 May 2013
NAV (11 June 2018) ₹24.6082
Plan Type Direct
Rating by Groww 3 Star
AUM (Fund Size) ₹987 Cr
Riskometer Very High
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark NIFTY 500 since its launch.
Age of the fund 5 years old
Expense Ratio 1.50%
Exit Load If redeemed bet. 0 Days to 365 Days; Exit Load is 2%; If redeemed bet. 365 Days to 730 Days; Exit Load is 1%;
Type  Open Ended

Investment Objective

Parag Parikh Long Term Equity Fund is a diversified equity scheme an objective to generate long-term capital growth from an actively managed portfolio primarily of equity and equity related securities.

Sector Allocation

Sectors


Parag Parikh Long Term Equity Fund 

Cash 25.8%
Equity 74.2%

Holding Analysis

2. ICICI Prudential US Bluechip Equity Fund-Direct – Growth

Key Information

AUM 288 Cr
NAV (Direct Growth) 28.1 (23 May 2019)
Minimum SIP Investment 5000
Expense Ratio (Direct) 0.10%
Risk High
Fund Manager Rohan Maru, Priyanka Khandelwal
Exit Load Exit load of 1% if redeemed within 1 month
Inception 02 Jan 2013

Investment Objective

ICICI Prudential US Bluechip Equity Fund aims to provide capital appreciation to investors by concentrating on investing in equity and equity related securities (this includes ADRs/GDRs issued by Indian and foreign companies) which are listed on stock exchanges like New York Stock Exchange (NYSE) and/or NASDAQ.

Sector Allocation

Sectors ICICI Prudential US Bluechip Equity Fund-Direct – Growth
Cash 288 crs. (100%)
Healthcare 33.6%
FMCG 16.4%
Services 13.3%
Technology 11.5%
Financial 8.5%

Holding Analysis

Top 10 Holdings

Name % of Assets Sector
Amazon. com Inc. (USA) 4.7% Cons Durable
Honda Motor Company (Japan) 4.0% Automobile
Merck & Co Inc (US) 2.8% Healthcare
Mondelez International 2.7% FMCG
Alphabet Inc Class C 2.6% Technology
Express Scripts Inc. (USA) 2.5% Healthcare
L Brands Inc 2.5% Services
Gilead Sciences Inc. (USA) 2.5% Healthcare
Starbucks Corporation (USA) 2.4% FMCG
Stericycle Inc. (USA) 2.4% Services

3. DSP US Flexible Equity Fund

Key Information

AUM 231 Cr
NAV (Direct Growth) 25.1 (23 May 2019)
Minimum SIP Investment 5000
Expense Ratio (Direct) 1.55%
Risk High
Fund Manager Kedar Karnik, Laukik Bagwe, Jay Kothari
Exit Load Nil
Inception 03 Jan 2013

Returns

Duration Fund Returns (Direct)
Since Inception 14.7%
1 Year Return 2.8%
3 Year Return 13.1%
5 Year Return 11.6%

Investment Objective

This fund invests in units of BlackRock Global Funds US Flexible Equity Fund (BGF – USFEF), with capital appreciation being a priority.

This scheme also invests substantial units in other similar overseas mutual fund schemes at the discretion of the Investment Manager. The scheme may also invest a huge corpus in DSP Mutual Fund’s money market securities or liquid schemes. This provision is done to meet the liquidity requirements from time to time.

However, there is no assurance to meet the investment objective.

Sector Allocation

Sectors DSP US Flexible Equity Fund-Direct – Growth
Cash 231 crs. (100%)
Equity 0 crs. (100%)
Debt 231 crs. (100%)

 Top Holdings

Name Sector % of Assets
Black Rock Global Funds – US Flexible Equity Fund Financial 96.5%

4. Aditya Birla Sun Life International Equity Fund

Key Information

AUM 62 Cr
NAV (Direct Growth) 21.3 (24 May 2019)
Minimum SIP Investment 1000
Expense Ratio (Direct) 2.22%
Risk High
Fund Manager Vineet Maloo
Exit Load Exit load of 1% if redeemed within 365 days
Inception 01 Jan 2013

Returns

Duration Fund Returns (Direct)
Since Inception 9.7%
1 Year Return 4.3%
3 Year Return 10.2%
5 Year Return 7.0%

Investment Objective

Aditya Birla Sun Life International equity fund intends to invest in a diversified portfolio of equity and equity-related securities in the international markets with a purpose of attaining long-term growth of capital.

Sector Allocation

Sectors Aditya Birla Sun Life International Equity Fund- Plan A- Direct
Services 18.4%
FMCG 17.4%
Financial 15.6%
Technology 12.2%
Engineering 9.8%

 Top 10 Holdings

Name % of Assets Sector
Unilever NV 3.6% FMCG
Grupo Aeroportuario del Pacífico 2.9% Services
Amerisource Bergen Corp 2.4% Healthcare
Salesforce Com. 2.2% Technology
Guidewire Software Inc. 2.2% Technology
Visa Inc 2.2% Financial
Union Pacific Corporation 2.2% Services
Monsanto (USA) 2.2% Chemicals
Tencent Holdings Ltd. 2.1% Technology
Microsoft Corporation (US) 2.1% Technology

Types of International Mutual Fund

Global Funds 

   Country Funds   

     

Regional Funds

Global Funds Country Funds  Regional Funds
Global funds are those funds which invest in both domestic and world markets. Although global and international mutual funds sound similar they are quite different, as in the case of International mutual fund the money is invested entirely in the foreign markets and not in the domestic markets. If you are willing to invest in a single country then country funds can come handy. A country fund carries a portfolio of securities, broadly shares, of companies situated exclusively in a given country.

Some of the popular countries in this international mutual fund type are Africa, Argentina, Brazil, China, Canada, etc.

If you are attracted towards specific regions in a particular country or group of different countries then you can opt for regional funds. Investors invest in specific regional mutual funds of various geographical regions because these funds offer enormous returns.

Features of International Mutual Fund

1.Professional Management

Since we are aware that one of the main reasons                                                  investors invest in mutual funds is due to the
professional guidance of an expert.
International mutual funds are more
complicated and beyond the knowledge of
a normal investor so taking assistance from a
mutual fund manager is the way to go.

 

2.Diversification of Portfolio 

As discussed earlier, one of the major reasons
for investing in international mutual fund is diversification.
An international mutual fund consists of High to Low-risk
investments.

 

Risks Associated with International Mutual Fund

1. Economic and Political Risk              2.Currency Fluctuation Risk

           

Conclusion

So, if you are looking for a diversified portfolio and want to make most out of the economies which are developing rapidly, then this is your investment avenue!

However, if you have a low-risk appetite you should most likely avoid these funds  It is advisable to take help from a professional for investing in such a peculiar instrument.

 Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww