How Does International Mutual Funds Benefit Your Portfolio?

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There are plenty of investment options available for Indian investors. Sometimes making an investment decision might become a tad difficult especially if you are new to investing. One does not have to be an expert to make an investment decision. If you are good at financial planning and know how to determine your short term and long term goals, you may be able to work well with your money.

Mutual funds have picked up momentum among new age Indian investors. Over the past few years, several individuals have shifted from conservative investment schemes to mutual funds. That’s because mutual funds offer diversification, are transparent in nature and offer active risk management.

What mutual funds houses do is that they collect money from investors sharing a common investment objective anyways this pool of funds across the Indian and foreign economy. Depending on the nature of the scheme and its ultimate investment goal, mutual funds invest across various asset classes like equity and debt. It may also invest in money market instruments like call money, certificates of deposits, treasury bills, debentures, company fixed deposits, corporate securities, government bonds, etc.

What are international Mutual funds?


There are several mutual funds schemes for investors to choose from. Depending on the investment objective, risk appetite, investment horizon and existing liabilities an investor can choose a mutual fund. Mutual funds offer liquid to an investor’s investment portfolio. If you are someone who is seeking capital appreciation over the long term through Investments and equity related instruments, you can consider investing in international mutual funds. International mutual funds give investors an opportunity to generate income by investing in companies that are operational in the USA, UK, Europe and other countries across the globe. Investors should understand that markets across the globe run on different cycles. The equity markets in the USA work way differently than they do in India. Why is Indian consumers brand conscious? We have several foreign brands that we use in our daily life. If you ever wondered how you would get an opportunity to invest in a top International sports or electronic brand then you can do so by investing in international mutual funds.

Add an international touch to your mutual fund portfolio


International funds invest in stocks of companies that are listed outside India. Such companies where international mutual funds invest in for income generation may or may not offer their products or services to Indian consumers. Investors with a long term investment horizon in pursuit of wealth accumulation, retirement planning or any such long term goals can consider adding international mutual funds to their mutual fund portfolio. If you are someone who always wanted to invest in international companies whose products and services you use on a day to day basis then you can invest in international funds. Investing in overseas markets has now become easier due to the initiation of global equity funds.

Consider your risk appetite before investing


Although international mutual funds can be a great asset for an investor’s mutual portfolio, they should also take into consideration the risks that are involved with these investments. These are equity funds that are constantly exposed to the market’s volatile nature. Over the short term, they can incur losses to the portfolio. Which is why investors with a short term investment horizon should reconsider investing in international mutual funds. Also, since these equity funds they do not guarantee any returns. So investors are expected to determine their risk appetite before investing. They can also refer to a professional mutual fund advisor who might help them take an informed investment decision.