paragraph

Ask any Indian investor about his expectations from the market and it would always be higher returns year on year. However, the recurring volatility has led many to look for alternate markets including the foreign markets that lend scope for diversification too. With domestic equity markets now available at higher rates, Indian investors have jumped domestic boundaries to invest in stocks of foreign companies through international mutual fund schemes, the latest being DSP Global Innovation Fund of Funds.

Rolled out by DSP Mutual Fund on January 24, 2022, this FoF scheme will invest in overseas active and passive mutual funds along with exchange-traded funds (ETFs). Roughly 10-15 per cent of the investments will be parked for long periods in innovation and technology-driven companies. However, this is not the first fund that has its premise in international stock and fund markets. To date, there have been 63 international fund launches by domestic mutual fund houses, one-third of which were launched in 2021 alone. These fund houses offer a variety of funds that invest primarily in America, Europe, Brazil, China, Asia and other emerging markets. Out of 63 international funds Indian investors can put their money in, 20 funds invest in the US markets. Among these, only two or three invest in technology companies listed in American stocks and funds. Others focus on other aspects including agriculture, mining and the real estate sectors.

<h2>Mutual funds investing in US stocks</h2>With many mutual fund houses allowing scope for exposure to US stocks, many Indian investors are now relying on professional services to diversify their investments in global stocks. In lieu of nominal fees, investors in India benefit from parking their money in US equity markets touted as among the most developed markets in the world. Most of these stocks that are otherwise not available in India can be invested in through these fund houses.

Retail folios are at an all-time high

Most retail investors choose their funds based on past years’ returns despite several warnings by the Association of Mutual funds of India (AMFI) and individual mutual fund houses that historical returns must not be extrapolated to expected returns in the future. Mutual fund houses investing in US securities have outperformed those limited to investing in the domestic market in the past two years. This explains the sudden surge by around three times in retail investor accounts over the past year. Though the global market holds many opportunities to invest in international funds, most investors prefer US stocks owing to superior returns from US indices and the benefit of having a weak rupee vis-à-vis the dollar.

<table><tbody><tr><td>Fund Name</td><td>Five Years’ Returns (In%)</td></tr><tr><td>Motilal Oswal NASDAQ 100 ETF</td><td>25.27</td></tr><tr><td>Franklin Ind Feeder Franklin US Opportunities Fund</td><td>20.34</td></tr><tr><td>Nippon India US Equity Opportunities Fund</td><td>19.01</td></tr><tr><td>PGIM India Global Equity Opportunities Fund</td><td>18.70</td></tr><tr><td>ICICI Pru US Bluechip Equity Fund</td><td>18.18</td></tr></tbody></table>

Source: Value Research Website

Here are last five years' best performing international mutual funds

Top five international funds based on last five years’ returns

RBI Monetary Policy: What is reverse repo rate?

Digital rupee & cryptocurrencies: What are the key differences?

World Cancer Day: Tracing the importance of cancer insurance policy in today’s times

Invesco India Flexi Cap Fund: All you need to know

Navi US Total Stock Market Fund of Fund: All you want to know

DSP Global Innovation Fund of Funds: An NFO Review

As interest rates rise, investors should explore fixed deposits

Mutual Funds: Why should you not stop SIP despite volatility

Should you stop mutual fund SIPs when the markets are rising relentlessly?

Income Tax: How to manage your tax issues well

Tax is an important component of your overall financial plan. You should aim to pay the least possible tax without upsetting your investments, which should be designed around your life goals. Read further to know more

Gold gains ₹97; silver jumps ₹527

In the international market, gold was trading higher at USD 1,777 per ounce while silver was flat at USD 20.07 per ounce.

Adani Ports Q1 net profit drops 17% to ₹1,091.56 cr

Adani Ports had clocked a consolidated net profit of ₹1,312.9 crore in the corresponding period a year ago, according to a regulatory filing.

Equity mutual funds' inflow drops 43% to ₹8,898 crore in July, AMFI data shows

The net inflows in July were lower compared to the net inflow of ₹15,495 crore seen in June, ₹18,529 crore seen in May and ₹15,890 crore in April, according to data released by Association of Mutual Funds in India (Amfi)on Monday.

Market Wrap: Sensex climbs 465 points; Nifty above 17,500

The 30-share BSE gauge climbed 465.14 points or 0.80 per cent to finish at 58,853.07. During the day, it jumped 546.97 points or 0.93 per cent to 58,934.90.