How to invest in international mutual funds

• Follow

International mutual funds are those funds that invest in foreign companies. These funds are also referred to as overseas or foreign funds.

Investors look for foreign funds to diversify their portfolios. But it is important to understand the amount of money that needs to be invested in it along with other factors affecting investments.

Money9 Helpline hosted FinFix Research & Analytics’ founder, Prableen Bajpai to resolve the queries of the callers.

Here are a few queries:

S Ghosal, Kolkata: I am 42 years old. I make a monthly contribution of Rs 6000 as SIP. I fancy investing in foreign funds but my advisor has advised me not to invest right now as I am new to mutual funds. When will be the right time to invest in these funds?

Bajpai: Investor needs to understand that global funds are a component of equities. You can definitely invest in these funds. But you should ideally invest 25 % of the component in the foreign funds. Avoid investing in markets like China and Brazil. I would suggest investing in index funds in the US market.

Anurag Sah: I have Motilal Oswal NASDAQ 100 FOF and Parag Parikh which have international exposure. Can I take SBI Focussed which has also international exposure?

Bajpai: The top companies in NASDAQ 100 are Microsoft, Apple, Netflix. These top 10 companies overlap with Parag Parikh, SBI, and other funds. So always check the top 10 holdings of the funds. There is no point in investing in the same companies through different funds. You can look for an emerging markets theme when investing in international funds.