Global mutual funds, which invest in companies abroad, have given an average profit of 14% in just one year. This has got Indian investors excited, as it is better than many local options. People are now wondering if investing in foreign markets is the next hot trend.
How Big Gains in Global Funds are Driving the Growth in Mutual Funds?
A 14% return sounds great, but global funds can be risky due to currency changes or world events. Experts suggest putting only 10-20% of your money in these funds and holding them for 5-10 years to stay safe.
Big gains are driven by strong U.S. tech stocks, rising commodity prices in emerging markets, and a weaker Indian rupee, which boosts returns for Indian investors. Many central banks in Europe and emerging markets have started cutting interest rates, making global investments more attractive.
Last year, 66 international mutual funds made their mark, delivering an average return of 14%. Out of these, 44 funds gave double-digit returns, 21 had single-digit gains, and one saw a small loss.
DSP World Gold FoF led with a whopping 70.47% return, followed by Mirae Asset Hang Seng TECH ETF FoF at 52.06% and Mirae Asset NYSE FANG+ETF FoF at 41.06%. On the lower end, PGIM India Global Equity Opp FoF returned just 0.07%, while Mirae Asset Global Electric & Autonomous Vehicles Equity Passive FOF lost 1.70%.
Where Should You Invest Now?
In times like these, expert suggests putting 10-15% of your money in global funds to spread risk. While the outlook is positive due to strong growth and fair prices outside the U.S., risks like trade tensions could cause ups and downs. For safer growth, stick to diversified Indian Mutual Funds and use SIPs for the long haul.
The Indian market is more consistent than international funds, which indicates that “domestic funds have higher return potential with a wide range of categories to pick from,” says Chirag Muni, Executive Director, Anand Rathi Wealth Limited.
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