We all use Google, Facebook, and Amazon on a day-to-day basis. But have you thought about investing in these companies? International funds lets you invest in international stocks easily in a systematic manner.
In this article we will know more about international funds and the different aspects of international funds.
The international fund is a category of mutual fund that invests in international companies that are not listed in Indian exchanges. The fund invests in the stocks market of the foreign countries such as USA, Brazil. These funds offer an opportunity to invest in the overseas markets.
Some international funds invest in the stocks of US, Europe, Brazil, China, Japan and other markets. Other international funds invest in companies of a particular field such as agriculture, mining, technology.
International funds provide geographical diversification in your portfolio. It helps to reduce the risks associated with the home country and gain from the returns generated by other markets.
By investing in these funds, you can invest in some of the biggest companies in the world such as Facebook, Google, Amazon and Netflix.
As discussed earlier, international funds based on their investment portfolio can be classified into various factors. Here are some types of international funds.
Regional Funds
The regional funds invest in countries as per the geographical location such as Asian countries, European countries,etc.
Country-specific Funds
These funds only invest in companies of a particular foreign country such as China, Japan, etc. across the different sectors.
Global Sector Funds
Global sector funds invest in a particular sector or industry across different countries. These funds may invest in sectors such as real estate, gold, and natural resources companies.
International funds, just like any other equity fund, should be invested in a systematic manner through Systematic Investment Plan(SIP). Ideally, investors should not have over 15-20% of their portfolio invested in international funds. Also, it is important to check for any related exposure in the current portfolio.
As international funds differ from Indian funds and requires research, it is better to take an advisor’s advice before investing in international funds.
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