What is an international mutual fund?: If you are already investing in domestic mutual funds, international mutual funds can be a step up for your portfolio. Investing in international mutual funds is no different than buying units of domestic funds – you invest in rupees and receive units of the international fund in return. The corpus thus pooled is invested in stocks listed on foreign exchanges, helping you participate in the growth of foreign economies.
Benefits of international fund investments: The biggest advantage of investing in international mutual funds is geographical diversification. This ensures that all your investments are not tied to a single region, thus enabling you to benefit from the growth of diverse economies. Further, your portfolio will also be stronger in the face of geopolitical unrest or volatility in your domestic market. Secondly, like discussed earlier, you get an opportunity to participate in the growth of the companies you support, like Netflix, Uber, etc. Finally, you can also benefit from currency diversification and protect your portfolio when the rupee falls against international currencies. The depreciating rupee can act in your favour as an appreciation in dollar value will boost your returns.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market, including the fluctuations in interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes.