[Updated on 15th October 2021]
Picking stocks on your own can be challenging especially when it comes to international companies because there are too many options and factors that you need to evaluate.
However, there’s a solution: International mutual funds! In this blog, we’ll walk you through some fundamentals and share some of the best international funds currently being recommended on Cube Wealth.
International funds are Indian equity funds that invest in the shares of foreign companies like Apple, Amazon, Barclays, Deutsche Bank, Fiat, Novartis, etc.
International mutual funds ensure that you do not have to deal with the time-consuming and complex task of picking individuals foreign stocks on your own.
A fund manager does that for you with the fund’s portfolio of international holdings. But that’s not all. Investing in an international fund is as easy as investing in any other mutual fund.
Other highlights of international funds:
Broadly speaking, international funds are of 3 main types based on where they invest in. Furthermore, there are 3 subgroups of top international mutual funds based on how they invest. Before adopting any investment strategy, it's advisable to download the Cube Wealth app and consult a Cube Wealth Coach who can provide guidance based on your risk tolerance.
This group includes global, regional, and sectoral international mutual funds.
The term global international funds may seem like a tautology but there’s a reason for that. Global funds invest in stocks from across the world and not just one country.
For example, PGIM India Global Equity Opportunities Fund invests in stocks from the USA, France, Singapore, Netherlands, Switzerland, and more through the PGIM Jennison Global Equity Opportunities Fund.
Regional international mutual funds are the opposite of global funds. They invest in the stock market of only one country or region. Index funds are a great example.
They track one index from a single market (country). For example, Motilal Oswal S&P 500 Index Fund, which invests in all the stocks from the US index S&P 500.
Thematic or sectoral funds are highly specialised funds that look to gain from the benefits of a specific sector. For example, healthcare, power, consumer durables, and others.
There are 3 main types of international funds apart from the typical international funds that buy and sell stocks directly. These include index funds, fund of funds, and feeder funds.
International index funds track a particular index like the S&P 500 or FTSE 100. Their portfolio will mirror the index they’re tracking. For example, an S&P 500 index fund will include all stocks from the index.
Index funds, in general, look to generate returns that are on par with the market. Furthermore, most index funds are passively managed so their investment fee is known to be relatively low.
An international fund of fund scheme invests in the units of another mutual fund instead of buying and selling stocks itself. It’s important to note that fund of fund schemes can invest in multiple mutual funds.
An example of an international fund of fund scheme in India includes Edelweiss Greater China Equity Off-shore Fund. It invests in the units of the JPMorgan Funds - Greater China Fund.
In principle, an international feeder fund is similar to a fund of fund scheme but with one main difference - it only has one parent fund known as the master fund.
A feeder fund basically transports money that’s pooled from several investors to the master fund. For example, Franklin India Feeder - Franklin U.S. Opportunities Fund.
Through the Cube Wealth app, Wealth First, Cube's mutual fund advice partner, handpicks the finest international fund for you. However, at Cube Wealth we recommend that you consult a financial advisor or a Cube Wealth coach before investing in any asset, because investing always involves some risk and it is best to seek advice when investing.
Invesco EQQQ Nasdaq 100 ETF is the top fund that Cube Wealth suggests you if you want to invest in international funds. However, we have highlighted a few more international funds that may emerge in the future.
Invesco EQQQ NASDAQ-100 ETF FoF - Direct Plan is Open-ended International Equity scheme which belongs to Invesco Mutual Fund House. The schemes seeks to generate returns by investing predominantly in units of Invesco EQQQ NASDAQ-100 UCITS ETF, an overseas exchange traded fund, which seeks to provide investment results which, before expenses, generally correspond to the price and yield performance of the NASDAQ-100 Notional Index (Net Total Return) in USD.
Let’s take a look at one of the top holdings in the portfolio of the Invesco EQQQ Nasdaq 100 ETF Fund of Fund.
ICICI Prudential US Bluechip Equity Fund (Growth) is recommended for investors who have advanced knowledge of macro trends and prefer to take selective bets for higher returns compared to other Equity funds. At the same time, these investors should also be ready for the possibility of moderate to high losses in their investments even though the overall market is performing better.
Let’s take a look at the top 5 holdings in the portfolio of the master fund, ICICI Prudential US Bluechip Equity Fund (Growth).
PGIM India Global Equity Opportunities Fund (Growth) scheme seeks to generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.
Let’s take a look at the holding in the portfolio of the master fund, PGIM India Global Equity Opportunities Fund (Growth).
Aditya Birla Sun Life Global Emerging Opportunities Fund is an Open Ended Scheme ideal for Long Term Investment offered by Aditya Birla Sun Life Mutual Fund.
Let’s take a look at the holdings in the portfolio of the master fund, Aditya Birla Sun Life Global Emerging Opportunities Fund (Growth).
ICICI Prudential Global Stable Equity Fund’s objective is to provide adequate returns by investing in the units of one or more overseas mutual fund schemes, which have the mandate to invest globally. The Scheme may also invest a certain portion of its corpus in domestic money market securities and/or money market/liquid schemes of domestic mutual funds including that of ICICI Prudential Mutual Fund, in order to meet liquidity requirements from time to time.
Let’s take a look at the holding in the portfolio of the master fund, Aditya Birla Sun Life Global Emerging Opportunities Fund (Growth).
Motilal Oswal Nasdaq 100 Fund of Fund (G) is a US Equity International Equity scheme predominantly investing across International Equity instruments with an investment objective to generate wealth over the long term.
Let’s take a look at the holding in the portfolio of the master fund, Motilal Oswal Nasdaq 100 Fund of Fund (Growth).
DSP World Mining Fund invests primarily in leading international companies in the mining and metals sector. It does this by investing in the BGF World Mining Fund. This fund strongly believes in the future growth-potential of international mining, metals & industrial companies.
Let’s take a look at the holding in the portfolio of the master fund, Motilal Oswal Nasdaq 100 Fund of Fund (Growth).
Investing in international funds is as simple as investing in any other mutual fund. This means that you have two options:
Intermediaries like investment apps allow you to buy regular international mutual funds. Regular international mutual funds typically have a higher expense ratio than direct international mutual funds. But they're ideal for busy professionals who have no time to for in-depth research.
AMCs offer a way to buy "direct" international mutual funds. The investment cost, mainly the expense ratio, for direct mutual funds is lower than regular mutual funds.
However, you'll have to do the research yourself and pick international funds that suit your investment portfolio. You may also see a Cube Wealth Coach or download the Cube Wealth app to effectively implement these tactics and accomplish long-term financial objectives.
Here's how handpicked mutual funds work on the Cube Wealth app
Ans. International mutual funds are investment vehicles that allow individuals to invest in a diversified portfolio of assets from various countries and regions around the world. These funds are managed by professional fund managers and can include stocks, bonds, and other securities from international markets.
Ans. Choosing the best international mutual fund for 2023 depends on your investment objectives, risk tolerance, and time horizon. It's essential to research funds that align with your goals, analyze their historical performance, and consider factors like expense ratios and management fees. Consulting with a financial advisor can also be beneficial.
Ans. Investing in international mutual funds offers several advantages, including diversification, exposure to global markets, and potential for higher returns. International funds can help spread risk and provide opportunities for capital growth, especially when domestic markets are underperforming.
Ans. International mutual funds can carry additional risks due to currency fluctuations, political instability, and economic conditions in foreign countries. However, their risk level varies depending on the fund's specific focus and the regions it invests in. It's crucial to assess and understand the risks associated with a particular fund before investing.
In 2023, the world of international mutual funds offers a diverse range of investment opportunities for those seeking to diversify their portfolios and tap into global markets. The best international mutual funds for 2023 are not only influenced by the economic and geopolitical landscape but also by individual investment goals and risk tolerance. As always, it's crucial to conduct thorough research and consider seeking professional financial advice before making any investment decisions.
Note: Facts & figures are true as of 15-10-2021. All information mentioned is for educational purposes and relies on publicly available information. None of the information shared here is to be construed as investment advice. We strongly recommend you consult a Cube Wealth coach before investing your money in any stock, mutual fund. PMS or alternative asset.
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