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POSTED BY ON July 11, 2012 2:20 pm COMMENTS (2)
Dear All,
Is it worth to invest in ICICI Pru US Bluechip Equity Fund. The main reason for high returns from US Funds is decline is Rs. value. Please suggest whether to invest in this fund.If yes what should be the time horizon
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If currency fluctuations alone interest you and make you feel USD is a better bet than INR the direct solution is currency derivatives. Why pay additional fees for a MF if you feel the gross return would not differ much?
If you read in US based books on investing most books advocate exposure to foreign assets. It means money needs to be invested in foreign assets where substantial growth opportunities exist. US companies, in order to diversify, invest in growth economies like India. Cross country investment comes with substantial currency risk. A US person investing in India for the last 2 years might have gotten near zero % return in absolute terms (Sensex being in the 17k-18k mark since 2010). But they have really lost 20+% because they held assets in rupees that depreciated. Such is the impact of currency fluctuations.
If you can withstand such shocks by all means get an exposure to the US market but limit the exposure to less than 5% of your portfolio in general and not more than 10% at any times.
Dear Desaichinmay, Do you really feel that currency fluctuations ‘ll work in your favor? Can you put an example for your thought process, keeping in mind the current Rs. v/s USD rate & the future path as per you?
Thanks
Ashal