As the name suggests, an international mutual fund invests in companies in foreign countries. Hence, these funds are also called Foreign Mutual Funds or Overseas Funds. Over the last decade, the awareness of investment opportunities around the globe has increased. Investors want to explore international markets and tap into their earning potential.
International funds are Indian equity funds that invest in global stocks such as Apple, Amazon, Barclays, Deutsche Bank, Fiat, Novartis, and others. You won’t have to deal with the time-consuming and complex chore of picking specific overseas stocks if you use international mutual funds.
Types of International Funds
1. Global Funds
While the names might seem synonymous to you, international funds and global funds are not the same. Global Funds invest in securities all around the world including the country in which you reside. On the other hand, International Funds invest in securities around the world except for the country in which the investor resides.
2. Regional Funds
As the name suggests, regional funds invest in companies from a specific geographical region anywhere in the world.
3. Country Funds
Country Funds invest in securities belonging only to one foreign country. This allows investors to benefit from a specific country’s economy. This does require extensive research.
4. Global Sector Funds
Global Sector Funds focus on companies belonging to a specific sector in countries around the globe. The primary focus of these funds is to gain exposure in a particular sector.
7 Best International Mutual Funds
1. DSP Global Allocation Fund
Open ended Fund of Fund scheme investing predominantly in units of BGF – GAF (BlackRock Global Funds – Global Allocation Fund). May also invest in units of similar overseas MF schemes. Aims to generate returns competitive with that of global stocks at lower volatility over a full market cycle. Invests in stocks, bonds, currencies and cash equivalents over 40 countries and 30 currencies. Follows rigorous investment process with a top-down macro strategy to decide asset allocation. Follows bottom-up approach for security selection
2. PGIM India Global Equity Opportunities Fund
PGIM India Global Equity Opportunities Fund the PGIM India Global Equity Opportunities Fund Direct-Growth is a PGIM India Mutual Fund International mutual fund strategy. PGIM India Global Equity Opportunities Fund Direct-Growth manages assets of 1,371 crores (AUM).
The fund’s expense ratio is 1.39 percent, which is comparable to the expense ratios charged by most other international funds. The 1-year direct growth returns of the PGIM India Global Equity Opportunities Fund are 29.08 percent. It has returned an average of 12.72 percent per year. PGIM Jennison Global Equity Opportunities Portfolio has the top five holdings in the fund.
The scheme aims to achieve long-term capital growth by investing primarily in units of overseas mutual funds that specialize in agricultural and/or would be direct and indirect beneficiaries of the agriculture and/or affiliated/allied sectors’ anticipated growth.
3. Aditya Birla Sun Life International Equity Fund – Plan A
Invests in stocks across the globe with no regional bias. Capitalizes on the strengths of individual countries. Invests in top performing stocks even in the markets posting low growth figures. Engages Standard and Poor’s Investment Advisory Services LLC (SPIAS) for investment advice and thereby, leverages their expertise in global equity research of more than 11 years. Maintains diversification and avoids concentration risk by containing its sectorial exposure within a particular range of the sectorial weight followed by its benchmark index i.e. S&P Global 1200 TRI. Uses a blended strategy of top-down and bottom-up approaches without any market capitalisation or sector bias
4. Nippon India US Equity Opportunities Fund
The Nippon India Japan Equity Fund, as its name suggests, is a mutual fund managed by Nippon that invests in equity securities listed on Japanese stock markets.
The fund aims to generate long-term capital gains for its investors. In addition, it invests a portion of the fund in money market instruments and bonds in order to offer stable returns. 90% of the fund’s assets are in equities, with the remaining 10% in other assets. Engineering (22%) is the most heavily weighted sector in equities, followed by FMCG (10%) and automobile firms (10 percent). The 1-year returns on Nippon India US Equity Opportunities Fund Direct-Growth are 26.95 percent. It has had an average yearly return of 17.43% since its inception.
5. ICICI Prudential US Bluechip Equity Fund
The ICICI Prudential US Bluechip Equities Fund’s investment objective is to provide investors with long-term capital appreciation by investing primarily in equity and equity-related securities of companies listed on recognized stock exchanges in the United States of America.
The Scheme would also invest in American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) issued by Indian and overseas corporations. The ICICI Prudential US Bluechip Equity Direct Plan-Growth manages assets worth 1,766 crores (AUM). The fund’s fee ratio is 1.27 percent, which is comparable to the expense ratios charged by most other international funds.
The last one-year growth returns on the ICICI Prudential US Bluechip Equity Direct Plan were 33.02 percent. It has had an average yearly return of 18.90% since its inception.
6. Edelweiss Greater China Equity Off-shore Fund
The Scheme aims to provide long-term capital appreciation by investing in JPMorgan Funds – JF Greater China Equity Fund, an equity fund that invests primarily in a diversified portfolio of companies incorporated in, or with their registered office in, a country in the Greater China region, or that derive the majority of their economic activity from that country.
The Edelweiss Greater China Equity Off-shore Fund Direct-Growth manages assets of 1,792 crores (AUM). The fund’s fee ratio is 1.43 percent, which is greater than the expense ratios charged by most other international funds. The Direct-Growth returns of Edelweiss Greater China Equity Off-shore Fund in the last year were 15.90 percent. It has had an average yearly return of 16.37 percent since its inception.
7. Axis Global Equity Alpha FoF Direct
Axis Global Equity Alpha FoF Direct – Growth is a International mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 1 yrs, having been launched on 04/09/2020. Axis Global Equity Alpha FoF Direct – Growth has ₹1,565 Crores worth of assets under management (AUM) as on 30/06/2021 and is medium-sized fund of its category. The fund has an expense ratio of 0.39%, which is less than what most other International funds charge.
The fund has the majority of its money invested in financial sectors. It has taken less exposure in Financial sectors compared to other funds in the category. The fund’s top 5 holdings are in Schroder ISF Global Equity Alpha.