Which are the international equity mutual fund available in India?

Diversification is a revolutionary force that every successful investor swears by in the financial market. Previously, it was just a way of allocating capital in various asset classes within the Indian financial market. However, with technological advancement, the diversification force has jumped over the geographical boundaries. Now, investors swear by the process of investing in foreign markets that are not affected by the fluctuations in the Indian market. Whatever may be the news or event in India, you can ensure your foreign portfolio follows that country’s market trend.

There are two ways through which one can invest in foreign stocks: By opening a Demat account with an international brokerage firm or investing in international mutual funds offered by Indian mutual fund companies. When compared to the former, the latter is more cost-effective and less cumbersome. Through investing in an international equity mutual fund, you get access to foreign equities in countries and continents such as the US, Europe, Japan, China, ASEAN countries, etc. Apart from international equity mutual funds, you can invest in foreign stocks through index funds, ETFs, Fund-OF-Funds, etc.

A Fund-Of-Fund is one of the most widely used frameworks for investing in foreign markets by Indian Asset Management Companies. A FOF is a fund that invests in other mutual fund schemes. The fund manager of such funds holds a portfolio of international mutual funds, rather than individual stocks of international companies. A FOF that invests in international funds is taxed at the hand of investors as short-term capital gain tax if sold before 36 months (according to the applicable tax slab). However, if sold after 36 months, a long-term capital gain tax of 20% is levied. 

If you are looking to invest in foreign stocks, you can consider these international equity mutual funds. The assumed investment value is Rs 6 lakhs.

Franklin India Feeder Franklin US Opportunities Direct Fund-Growth: Franklin’s global mutual funds have shown a return of over 31%, with doubling investor money in 1.6 years. The expense ratio of this fund is 1.4%.

Nippon India US Equity Opportunities Fund: The fund has shown a return rate of over 28% and has doubled investor money in 1.6 years. The expense ratio for this fund is 0.71%.

ICICI Prudential US Bluechip Equity Direct Plan-Growth: With a growth rate of over 22%, this fund has doubled investor money in 2.9 years. The expense ratio of this fund is 1.14%.

Edelweiss Greater China Equity Off-shore Fund Direct-Growth: This fund has shown a return rate of over 16%, doubling investor money in 2.4 years. The expense ratio for this fund is 1.43%.

Aditya Birla Sun Life Global Emerging Opportunities Fund Direct-Growth: Aditya Birla’s international equity fund has a growth rate of 5.63% and has doubled investor money in 5.5 years. The expense ratio for this fund is 1.46%.