International Mutual Funds as the name suggest, these are the funds invested into international markets by the Indian mutual fund companies. If you wish to invest in the foreign equity market, you can do so by investing into foreign mutual funds. These funds are invested into foreign companies listed into their respective stock exchanges.
These funds are less known as they are not properly promoted by the mutual fund’s companies. These funds have great potential to fetch you high returns of as good as 30% in a year. At the same time, these funds are more volatile and risky as compare to other mutual fund schemes. I think this is the reason these schemes are not so popular among Indians.
What is International Mutual Funds?
The international mutual funds mean an investment in an international company via bonds and direct equity (stocks). India’s share of world GDP is only 3%, these mean another 97% of the world GDP is untapped by Indians. It’s a big opportunity to tap this opportunity outside the country and create wealth. Every country is going through ups and downs in the economic cycle.
So have you ever think of investing in the Indian market when there is down economic condition or unfavorable political environment? This is where you should think of grabbing the opportunity outside your own country. I am not telling you to invest all your capital into international funds, but some portion of your kitty can be invested in a foreign market via mutual funds.
Currently, India is promising the high growth as it is the fastest growing economy. But there is still uncertainty in any given condition. The 2019 election coming up, who has thought of demonetization, foreign investment trend in the Indian market is negative in 2018 so far. So nobody knows what the future holds for the Indian economy.
There are around 40 international mutual funds in India right now. You can invest in these funds just like you invest in other mutual fund schemes. There is no need to open an international account or going through another KYC process.
Alternatively, you can directly invest in foreign stocks. But do you have that daring to invest in direct foreign stocks? do you have that knowledge, time and patience? The answer is NO. Then there is only one way through which you can invest into foreign companies i.e. via mutual funds.
Top 5 International Mutual Funds
Now let’s have a look at top 5 international mutual funds.
Motilal Oswal NASDAQ 100 ETF ∗∗∗∗∗
This is an ETF fund by Motilal Oswal. The fund is investing in NASDAQ 100 companies. The fund was started in 2011. Since then it has given a very good return of 21% in 5 years, 22% in 3 years and 34% in 1 year. It has given 23.75% return since inception, which is way high as compare to any other international funds.
Asset Under Management (AUM) – 97.83 Crores (as on 30.09.2018)
Expense Ratio – 1.5%
Minimum Investment – Rs. 10000
Top 10 companies in which this fund has invested. Around 56% of the total AUM is invested in below 10 companies.
|Apple Inc. (USA)||Cons Durable||12.61|
|Amazon. com Inc. (USA)||Cons Durable||11.04|
|Microsoft Corporation (US)||Technology||9.99|
|Alphabet Inc Class C||Technology||4.74|
|Alphabet Inc Class A||Technology||4.1|
|Cisco Systems Inc. (USA)||Cons Durable||2.6|
|Intel Corporation (USA)||Technology||2.5|
|NVIDIA Corporation (USA)||Technology||1.94|
|Netflix Inc. (USA)||Services||1.85|
The fund has invested majority in the technology sector which is booming industry right now. The fund has given good returns over the last 7 years. If you are looking for higher returns, you should invest in this fund.
This fund invests in emerging companies in the foreign country. The fund was started in the year 2012 and has given an 18.41% return since then. It is suitable for a long-term investment like retirement planning, wealth creation, and portfolio diversification. It has given a return of 13.975 over 5 years, 15.19% over 3 years and 29.36% in 1 year.
Asset Under Management (AUM) – 755 Crores (as on 30.09.2018)
Expense Ratio – 1.82%
Minimum Investment – Rs. 5000
The objective of this fund is to provide long-term capital appreciation to investors by investing into equity related schemes of the companies listed in the US stock market. It also invests into ADR/GDR issued by the Indian and foreign companies. This fund is suitable for long-term wealth creation.
The fund has given return 13.11% over 5 years, 16.09% over 3 years and 26.61 over last one year.
Asset Under Management (AUM) – 222 Crores (as on 30.09.2018)
Expense Ratio – 2.28%
Minimum Investment – Rs. 5000
Top 10 companies in which this fund has invested. Around 29% of the total AUM is invested in below 10 companies.
|Amazon. com Inc. (USA)||Cons Durable||4.58|
|CVS Health Corporation||Healthcare||2.88|
|Mc Donald’s Corporation (US)||Services||2.77|
|Comcast Corporation (USA)||Communication||2.69|
|Starbucks Corporation (USA)||FMCG||2.65|
|Philip Morris International||FMCG||2.59|
|Microchip Technology Inc. (USA)||FMCG||2.54|
|Procter & Gamble (USA)||FMCG||2.5|
Like other funds, the objective of this fund is also to provide long-term capital appreciation and wealth creation. It also invests into equity related securities of the company listed into US stock market. It also invests some portion into the debt market and money market to provide consistent returns.
The fund has given a return of 16.81% over 3 years, 24.95% over 1 year and 13.48% since inception.
Asset Under Management (AUM) – 27 Crores (as on 30.09.2018)
Expense Ratio – 2.83%
Minimum Investment – Rs. 5000
Below is the major asset allocation of the fund.
|Booking Holdings Inc||Services||6.74|
|O Reilly Automotive Inc. (USA)||Automobile||5.93|
|Lowe S Companies Inc (USA)||FMCG||5.82|
|Alphabet Inc Class A||Technology||5.14|
|Amerisource Bergen Corp||Healthcare||4.85|
The aims to generate long-term wealth by investing into international equity market. In Plan – A, a majority of the portion is invested into equity market while in Plan -B around 65% of the corpus is invested into equity and rest is into debt related instruments.
The fund has given a return of 7.36% over 5 years, 9.88% over 3 years and 23.15% over last one year.
Asset Under Management (AUM) – 66 Crores (as on 30.09.2018)
Expense Ratio – 2.96%
Minimum Investment – Rs. 1000
Top 10 companies in which this fund has invested. Around 24% of the total AUM is invested in below 10 companies.
|Biogen Idec Inc. (USA)||Healthcare||2.35|
|Union Pacific Corporation||Services||2.34|
|Guidewire Software Inc||Technology||2.33|
|Microsoft Corporation (US)||Technology||2.26|
|Amazon. com Inc. (USA)||Cons Durable||2.21|
These funds are no doubt giving good returns on investment, but there is a high risk involved in these funds. Also, these international mutual funds are not suitable for passive investors as it requires a regular monitoring and analysis. So if you think you have enough time and resources for analysis try your hand in these international mutual funds.
Below is the summary of top 5 international mutual funds to compare and pick the best out of the bunch.
|Fund Name||Launch Date||Expense Ratio (%)||Assets||1-Year||3-Year||5-Year|
|Motilal Oswal NASDAQ 100 Exchange Traded Fund||Mar-11||1.5||98||33.83||22.29||20.8|
|Franklin India Feeder Franklin US Opportunities Fund||Feb-12||1.82||755||29.36||15.19||13.97|
|ICICI Prudential US Bluechip Equity Fund||Jul-12||2.28||222||26.61||16.09||13.11|
|Reliance US Equity Opportunities Fund||Jul-15||2.83||27||24.98||16.81||–|
|Aditya Birla Sun Life International Equity Fund – Plan A||Oct-07||2.96||66||23.15||9.88||7.36|
PS: All data points are taken from Value Research Online as on 17.10.2018