POSTED BY June 20, 2012 6:22 am COMMENTS (10)ON
Hello Manish,Ashal,BanyanF,Justgrowur money,weatlh u create and all the experts
How are u all?
ICCI Pru has recently introduced a new fund named US BLUECHIP EQUITY fund.
It is not a feeder fund and invests directly in US securities like Nasdeq etc
I want ur feedback on this new fund ….how will it be to add this fund in ones portfolio for diversification as I already have large cap,Multicap,Midcap,gold etf,NPS,PPF etc in Indian funds…
and how much alloaction should one have in one’s portfolio…
Awaiting reply at the earliest…
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10 replies on this article “ICCI PRU’S NEW US BLUECHIP EQUITY FUND”
Since u mentioned some International Funds and ETF are good for investing….
1.Pls share the names of those funds or ETF….(US ,Euro,etc
2.Also ur take on investing in economies of China(ASEAN etc)…what is ur opinion on these…
Dear Reveal all, the pros & cons are already discussed by dear Ramesh as well as dear BanyanFA. So to invest or not to invest ‘ll be a personal call.
My point is – On the taxation front, as the underlying asset is US Eq. & not Indian Eq. the fund ‘ll be treated as Debt fund & ‘ll be taxed accordingly. Another risk which missed by others is the currency conversion risk.
How much one can digest for these taxation & currency issues, again I leave it to the person who want to go for it.
Post tax return may not be that good. At least I feel so not predicting the US economy.
for US, best option right now is MoST-Nasdaq 100.
For emerging markets, Templeton India Equity Income is very good.
Also Fidelity International Opportunities fund is good. Whether it will remain controlled by Fidelity’s people from Hongkong is not clear.
The above two funds are great in that they have around 65%+ in Indian equities (and enjoy equity benefits of ltcg of over 1 year=0, etc) and rest 1/3 in foreign equities (mainly emerging markets).
Then there is,
ING Real Estate fund (for real estate exposure, internationally). Sectoral but very specific and unique fund.
Fidelity Global Real Assets fund has a good mandate too. Again unique in Indian context.
go through the fund fact sheets of all of them, and decide on your own.
Thanks for ur advise…Yeah India has better options for investment But for diversification .How about investing in economies of China (ASEAN etc) …If yes are there any proved funds with track record in India which invest in these economies..
If not in these then where else?
My few pennies :
1. I would personally not want to invest in US economy – not that Indian economy is growing at amazing rates – but I would want to invest my funds only where it would grow – I don’t perceive them growing in US.
2. ICICI managing US stocks – sounds a bit dicey to me. They are banned from doing any business in US – hence even if you go to Icici Pru, the first thing they ask is if you are US NRI or Not !
3. Geographical diversification is a good idea if you have wealth of 100’s of crores.. For an average Middle class citizen – India has better options for investment than outside.
I disagree with both 1, 3.
1. Investing in US companies is still international, since most of the US companies have MNC status. And if you think, US or world will not grow, then I will not argue further. 😉
3. Geographical diversification is good even with few lakhs to many crores. But it is an individual’s call. International diversification decreases the overall risk to the portfolio (read Graham or Bogle), without depending upon your total portfolio size. It is just that, it is easier and probably cheaper to do when you have more money. But some international funds (MF and ETF) are good.
Thanks Ramesh for ur answer…Would like Ashal,Manish,BanyanF,Justgrowyour money and others to also share their thoughts on this New US BLUE CHIP FUND BY ICCI PRU…
Pls give ur inputs also
what reasons can you tell us which show that adding this fund will be advantageous to you?
Hi Ramesh and All
I was wondering since Indians do not have access to investing in US’s stocks and top companies…this fund would provide opportunity…Also since we all have access to Indian mutual funds..Portion of This USA fund would be good for diversification…
I m not recommending this fund…
I just want an advise how will it be to add this fund to ones portfolio ….
I am just asking as a layman who has already invested in Indian Mutual funds of Large,Mid,Multi caps ,Gold etf ,PPF and NPS…
Check MoST-Nasdaq 100 ETF, which is probably the best at present.
Another option is the feeder fund of Franklin’s, but it is a fund of fund and slightly more expensive as compared to the above fund.
ICICI US Bluechip.
Pros: equity fund investing in US companies, not a feeder fund. Active fund.
1. 20-25 companies mandate is seriously silly, in my opinion. Why should the mandate be limited to this- focusing is a bad way to run any mutual fund. Yes, if you do not find any more companies, you can have 20 companies, but if you can find more, you invest across the companies. I do not think US markets require such focus.
2. ICICI people do not have people who are well versed in US market analyses. In my opinion, they are even struggling to get people to manage Indian MFs. So…
3. Presently, it is better to invest in Indian MFs rather than US, because Indian markets are way cheaper (there is more of a bear market here, than there, at the moment).
Also, there is another option of Birla International Equity if you want to have direct international equity. Plus, you can have some international based demat accounts (kotak and probably icici have that facility) and invest in the vanguard’s and fidelity’s index funds). Etc.
I am a firm believer in having international equity exposure in one’s portfolio through a decent and experienced (ICICI does not have the latter presently) management (if active management is required).