Tech giants like Facebook, Amazon and even US investors like Mark Mobius are investing billions in India.
Should you flip side and invest in international funds?
On one hand, there is a claim that technology funds are risky. And the international market being a relatively “uncharted water” to an average retail investor only seem to amplify it.
On the other hand, an international fund offers an excellent diversification advantage. There is also rupee depreciation to benefit the investors.
It could be hard to weigh these two things by yourself.
Should you invest in International Funds or US-based mutual funds?
One of our Webinar participants asked the same question to Nilesh Shah, MD Kotak Mutual Fund.
Here is Nilesh Shah’s view on investing in International Funds.
Now Nilesh Shah has explained that global diversification is necessary and will be advantageous to an investor.
But let’s dig deep into this matter.
Why is having exposure to the global market or the US market in your investment portfolio important?
As I said earlier, India by itself is a huge growth market. Why should an investor look to invest outside India, when the world is looking to invest in India?
On a different occasion, we asked an experienced industry insider about the international funds. And whether to invest in them or not.
He reiterated that international funds, indeed, add diversification to your investment portfolio. He also pointed out a bias that most Indian investors are not aware of when it comes to global diversification.
But what’s more interesting is the magnitude of this diversification to international funds. To give you an example, India accounts for only 2% of the global stock market share.
So how effective is it to invest in international funds?
And what are you missing when you don’t have that international exposure?
Discover your answers in this insightful video!