International Fund for Diversification

POSTED BY SIVA PRASAD RAVIRALA ON August 25, 2012 10:52 pm COMMENTS (9)

Hi All,

Please suggest one best international Mutual Fund to start SIP for longterm. The reason is for diversification and also to get profit from International Markets/Companies.

Iam a Moderate Risk taker.

ThankYou

R Siva Prasad

 

9 replies on this article “International Fund for Diversification”

  1. Dear Ashal,

    Apart from return, we should also see risk level and consistency to select any mutual fund.
    Please tell what are other parts we have to focus to select a mutual fund specificly Global Fund.In brief, selection procedure of MF.

    Thank You
    R Siva Prasad

    1. Dear R Siva Prasad, the basic yardstick to select a MF ‘ll remain same no matter it’s an Indian fund or Global fund.

      Thanks

      Ashal

  2. Dear Ashal,

    Yes I Understand that currency fluctuation may affect our Net Returns.
    So what is our next step?
    Is return whatever showing in Value Research site is after considering Exchange Rate?
    Can we assume that as cost element just as Expense ratio by MF AMC? Please tell ur views.

    Thank You
    R Siva Prasad

    1. Dear R Siva prasad, it seems that you are looking or rather focusing only on the return part of these global funds. If you are feeling yourself strong enough to withstand those currency related issues & so the over all global economic situations, welcome to the world of global MFs.

      Please start investing.

      Thanks

      Ashal

  3. Dear Ashal and Lokesh

    I did not get the point ‘linked to commidities play’.
    Truely speaking, I have no deep knowledge.
    Sorry to say If I have knowledge I might have invest in Shares directly instead of Mutual Funds. I think the purpose of Mutual Funds is to help layman in investing shares.

    What I want is to invest in Global Markets and 3years return of a Global fund is 14.65 Annualised rate. So why I should not invest in Global Markets if there is growth? If not, Why there is no growth outside India?

    My Present Portfolio

    1. Canara Rebeco Equity Tax Saver-1000PM
    2. HDFC Equity-1000PM
    3. ICICI prudential Focused equity retail-1000PM
    4. Quantum Longterm Equity-1000PM
    5. IDFC Premiur Equity Plan A -2000PM
    6. PPF-500PM
    7. Bank RD-1000PM
    8. EPF-3500PM (Only Employee)
    9. Chit-2000PM

    Please comment on my portfolio and suggest me on Global Funds.
    Thanks for helping me

    Thank You
    R Siva Prasad

    1. Dear R Sivaprasad, Please read my first reply again & then tell what’s your take on this currency fluctuation issue?

      Thanks

      Ashal

  4. Dear R Siva, in addition to the info provided by dear Lokesh Jain, Please do note most of the global funds which are performing good in terms of return generated are some how linked to commodities play. Can you relate this interconnection?

    I do not know your current Indian portfolio, hence can’t comment on the diversification thing.

    Thanks

    Ashal

  5. Lokesh Jain says:

    Hi Siva Prasad –

    Though I hope My friend Ashal has made u understand the cons of International fund investing, I though give a different view as to have a global edge on your portfolio. There are now 2 ways to invest in global markets.

    1. Global Index ETF
    2. International Funds

    Index ETF allows you to invest in one country index like Hang Seng (Index of Hongkong), MOST Nasdaq 100 (Index of Nasdaq – US).

    There are many International funds which also provide investments in global emerging markets and also a mix of them. Most of them are Global Commodity funds and Emerging Market funds.
    Some of the funds are enumerated as below:-
    – Birla Sun life International Equity Plan A
    – JP Morgan JF ASEAN Equity Off Shore
    – DSPBR World Mining Fund
    – Mirae Asset Global Commodity Stocks
    – HSBC Emerging Markets
    – Kotak Global Emerging Market
    – DWS Global Agribusiness Offshore Fund
    – AIG World Gold
    – DSPBR World Gold Fund
    – ING Global Real Estate Retail

    Well analysis of returns you may find it in the below link.

    http://www.valueresearchonline.com/funds/h2_typecomp.asp?mode=snapshot&Type=1&objective=21

  6. Dear R Siva, do you know, global funds or say international funds are more risky than Indian funds? Why? Because these funds carry the risk of currency fluctuations also. Are you ready for it? I’m giving you a crude example.

    Presently 1 USD is equal to roughly 55 INR. Now if you are investing 1L Rs. today, what ‘ll be the USD worth of your money? 1818 USD. Now after 1Y, We assume 10% rise in there in your global fund. So the USD value ‘ll be 2000 USD. roughly. Now at the same time, the INR becomes stronger & now 1USD is equal to 49 INR. So what ‘ll be the worth of 2000 USD? It ‘ll be 98000 Rs.

    From the above example, you can see yourself, you have earn a positive return on your USD investment but actual profit to you in INR is negative due to currency fluctuations. I’m not saying this ‘ll happen to you. Opposite can also may happen that after your investment the USD becomes more stronger & touches 60 INR value. In this case, your actual return from the fund ‘ll be quite impressive.

    As you wrote yourself as a moderate risk taker, I w’d not like you to invest in global funds.

    Yes in case you are ready to understand these risks & want to give a shot, you are always welcome.

    Thanks

    Ashal

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