10 Best International Mutual Funds to Invest in India | 5paisa (2024)

In an increasingly linked world, buying simply in local markets may not be enough to maximize profits and reduce risk.

International mutual funds provide Indian investors with a chance to broaden their investments and gain exposure to the growth prospects of countries and companies abroad. By participating in these funds, investors can benefit from the knowledge of professional fund managers who closely watch global markets and make informed investment decisions.

What are International Mutual Funds?

International mutual funds are investment tools that pool money from various clients and invest in stocks across multiple countries or areas outside India. These funds can invest in stocks, bonds, or a mix of both, giving buyers diverse foreign assets. The main goal of international mutual funds is to provide buyers with exposure to foreign markets, sectors, and asset types that may be challenging in the domestic market.

How Do International Mutual Funds Work?

International mutual funds work similarly to local mutual funds but with a global investment mission. Fund managers regularly analyze investment chances worldwide, choosing stocks that fit the fund's investment goal and strategy. These funds can be broadly grouped into regional funds (focused on a specific area like Europe or Asia), sector funds (concentrated on a particular business like technology or healthcare), or global funds that spend across multiple regions and sectors.

Overview of Top 10 Best International Mutual Funds to Invest in 2024

Parag Parikh Long Term Stock Fund: This fund deals in Indian and foreign stock shares, giving exposure to global companies with excellent growth prospects. Its diverse assets and long-term investment strategies make it an attractive choice for Indian investors.

Franklin India Feeder: Franklin U.S. Opportunities Fund: This fund invests in the Franklin U.S. Opportunities Fund, giving Indian investors exposure to high-quality U.S. companies across different industries. It aims to profit from growth possibilities in the world's biggest economy.

ICICI Prudential U.S. Bluechip Equity Fund: focuses on investment in large-cap U.S. companies with a track record of steady success and sound foundations. It gives Indian businesses a way to gain exposure to the security and growth prospects of the U.S. market.

Edelweiss U.S. Technology Equity Fund: As the name suggests, this fund invests in U.S. technology companies, exposing Indian investors to the innovative and fast-growing tech sector in the United States.

Motilal Oswal Nasdaq 100 Fund of Fund: This fund tracks the success of the Nasdaq 100 Index, which consists of the 100 biggest non-financial companies listed on the Nasdaq Stock Market. It gives Indian buyers an easy way to invest in big U.S. technology and growing companies.

DSP World Energy Fund: This sector-focused fund invests in global energy companies, exposing Indian buyers to the energy industry abroad. It provides diversity benefits and the possibility for growth as the worldwide energy business changes.

Nippon India Japan Equity Fund: This fund invests in Japanese shares, giving Indian buyers access to the growth prospects of one of the world's biggest and most technologically advanced countries.

Mirae Asset S&P 500 Top 50 ETF Fund of Fund: This fund tracks the performance of the top 50 companies in the S&P 500 Index, exposing Indian investors to some of the biggest and most successful U.S. companies across different industries.

IDFC US Strategy Equity Fund: This fund invests in U.S. stocks, focused on companies with solid growth prospects and durable economic benefits. It gives Indian buyers a way to join in the growth of the U.S. market.

Kotak Global Emerging Market Fund: This fund invests in emerging market stocks, giving Indian buyers exposure to the growth prospects of growing economies worldwide. It offers diversification benefits and the chance to capitalize on the long-term growth possibilities of developing economies.

Performance List of Best International Mutual Funds 2024

Here is performance list of Best International Mutual Funds to Invest in india:

How to Find The Best International Mutual Funds?

Identifying the best foreign mutual funds for your investment account requires careful consideration of several factors. Here are some critical steps to help you find suitable funds:
● Define your financial goals and risk tolerance: Determine your financial goals, such as long-term growth, income generation, or a mix of both, and measure your risk tolerance level.
● Evaluate the fund's investing plan and stock composition: Understand the fund's financial method, the areas or sectors it works on, and the types of stocks it holds. Ensure the fund's plan fits your financial goals and risk profile.
● Consider the fund's success and track record: Review its past success over different periods and compare it to essential standards. However, remember that past success is not a promise of future results.
● Analyze the fund's executive team and investment process: Evaluate the knowledge and skill of the fund managers, as well as the financial process they follow. A well-established and focused business method can add to steady success.
● Review the fund's costs and fees: Compare the cost rates and other fees connected with the fund, as these can significantly impact your total profits over the long run. Lower fees provide a better chance for more significant net gains.
● Assess the fund's risk profile: Evaluate the fund's volatility, diversity, and risk management techniques to ensure the amount of risk matches your financial goals and risk tolerance.
● Consider the fund's availability and ease of investment: Ensure that the fund is readily available to Indian buyers and that you can invest and reclaim units without significant challenges or limits.

Why Should You Invest in International Mutual Funds?

Investing in foreign mutual funds offers several perks to Indian investors:
● Diversification: By buying in foreign markets, you can broaden your portfolio beyond local stocks and bonds. This diversification can lower overall stock risk and improve results.
● Access to global opportunities: International mutual funds provide exposure to companies and businesses that may not be available or well-represented in the Indian market, allowing you to capitalize on growth opportunities worldwide.
● Currency diversification: Investing in foreign funds can help reduce the effect of currency changes on your portfolio, as the fund's stocks are priced in different currencies.
● Professional management: International mutual funds are handled by experienced professionals with the knowledge and resources to study global markets, find suitable investments, and manage risk effectively.
● Potential for better returns: While past success is not a promise, foreign markets can offer good growth possibilities, especially in rising countries or areas with strong growth paths.

Benefits of Investing in the Best International Mutual Funds in India

Investing in the Best International Mutual Funds to buy in India can provide several advantages:
● Access to global markets: These funds allow Indian investors to join in the growth and success of businesses and industries worldwide, expanding their financial options beyond local markets.
● Diversification: By investing in foreign funds, investors can spread their investments across different areas, industries, and asset classes, possibly lowering total risk.
● Exposure to innovative companies: Many foreign funds focus on investing in innovative and disruptive companies, giving Indian investors exposure to cutting-edge technologies and businesses driving global growth.
● Currency appreciation: Investing overseas funds can benefit from currency appreciation, as the fund's stocks are paid in foreign currencies.
● Professional management: These funds are handled by experienced professionals with a deep understanding of global markets, investment strategies, and risk management methods.

Things to Consider Before Investing in Best International Mutual Funds

While participating in foreign mutual funds can offer significant benefits, it's essential to consider the following factors:
● Currency risk: Changes in currency exchange rates can impact the value of your investment, as the fund's stocks are priced in foreign currencies.
● Legal and political risks: International assets are subject to the legal and political settings of the countries where the fund works, which can bring extra risks.
● Taxation implications: participating in foreign funds may have different tax implications compared to local investments, so it's essential to understand the tax effects before participating.
● Higher fees: International funds may have higher cost ratios and management fees than local funds, impacting your total results.
● Volatility: International markets can be more risky than local markets, leading to higher investment value changes.

How can you invest in international mutual funds from India?

Investing in foreign mutual funds from India is pretty simple. Here's a step-by-step guide:
● Open a demat and trade accounts with a reliable exchange company or investment tool offering foreign mutual funds.
● Complete the necessary KYC (Know Your Customer) processes and provide the documents.
● Research and pick the foreign mutual funds that match your financial goals, risk tolerance, and investment timeline.
● Transfer cash from your bank account to your trade account.
● Place an order to purchase units of the chosen foreign mutual funds through your trading site or provider.
● Monitor your investments regularly and consider adjusting your portfolio to match your financial goals.

It's important to note that investing in foreign mutual funds may involve extra paperwork and legal requirements compared to investing in domestic funds. Consult with a financial advisor or investment professional to ensure compliance with all relevant laws and to build a well-diversified investment plan.

Conclusion

Investing in India's best foreign mutual funds is an excellent way to spread your portfolio, gain exposure to global markets, and improve your overall returns. With a wide range of choices available, Indian investors can choose from funds based on specific areas, sectors, or investment strategies that match their financial goals and risk tolerance. However, it's crucial to carefully assess the risks and perform a thorough study before participating in foreign mutual funds. By considering factors such as fund success, management team, costs, and risk profile, you can make informed choices and gain from global markets' growth possibilities.