How to diversify your portfolio with international funds

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International funds distribute the country risk of your investment portfolio while diversifying. Not just stock-specific, you can invest in international indices via international funds. Money9 Helpline hosted FinFix’s founder Prableen Bajpai to help you understand which route should you take and whether diversification via index funds is ideal for your investment portfolio.

Edited excerpts

Siddharth Banerjee, Delhi: Are Motilal Oswal NASDAQ and Mirae Asset FANG ETFs good for beginners to start investing? Can you suggest other moderately risky funds that I can park my money in?

Bajpai: It is very important to understand that these two funds cannot be compared. Though it is a passive strategy, the New York stock exchange fund allocates in 10 stocks, with equal weightage. So each stock will have an allocation of 10%. Your whole allocation will be dependent on these 10 stocks, of which 2 are Chinese. I think for beginners it is risky. This is for somebody who has already bought a simple basic passive strategy. The index in itself is riskier. I will suggest if you have to choose, go for NASDAQ 100.