Those who have invested in global technology equities or mutual funds that hold global technology firms are seeing good returns.
The objective for diversifying across overseas stocks is to add geographical diversity to the portfolio. Those who have invested in global technology stocks or mutual funds that hold global technology stocks are witnessing decent returns on their investments.
Data from value research shows the international mutual fund category generating nearly 19%, 9% and 7% over the 1-year, 3-year and 5-year respectively. While, the category average for international funds is about 19% over the last 12 months, some of the funds have delivered over 40% returns during the period.
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The bounce back of the tech stocks in 2023 has led to the strong gains in the international funds category. No wonder, the international funds category has been the top performer having gained 15.5% so far in 2023.
As per the past 1 year data, Mirae Asset NYSE FANG+ ETF has given the maximum returns as compared to other funds, indicating that technology sector has the best performing sector.
Mirae Asset NYSE FANG+ ETF with 69% returns over the last 1-year tops the chart. The Mirae Asset NYSE FANG+ ETF is a passively managed fund with investments in stocks in a proportion that match as close as possible to the weights of these stocks in NYSE FANG+ Index.
The NYSE FANG+ Index is an equal-dollar weighted Index designed to represent a segment of the technology and consumer discretionary sectors consisting of 10 highly-traded growth stocks of technology and tech-enabled companies. NYSE FANG+ Index consists of 10 stocks – Alibaba, Facebook, Alphabet, Apple, Baidu, Nvidia, Amazon, Netflix, Microsoft, Tesla.
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The market expects the technology firms to grow in future due to increased demand for their newer products.
Top 10 International mutual funds to invest in 2023
We all have heard of companies like Apple, Alphabet and Microsoft, but how many actually invest in them? What restrains investors from investing in these stocks is the lack of knowledge and resources. Well, international mutual funds aim to tackle these issues.
Mutual funds are managed by market experts who have more critical knowledge of the market than a retail investor. This allows diversifying the portfolio while maintaining a balance between risks and returns, depending upon the requirements of the investors.
An international mutual fund allows you to invest in global brands which is not economical for every investor otherwise. For instance, a single investor may not be able to buy a high valued share but in mutual funds, the fund manager has a pool of money from various investors. Hence the fund manager can buy such shares and then distribute profits accordingly.
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Investing in international mutual funds enables the investor to diversify their portfolio by making investments in international markets through SIPs or one-time lump sum investments. Though we have seen an increasing trend in investment towards international mutual funds, still the majority of the investors restrict their portfolio to domestic mutual funds thus lacking geographical diversification.
Despite all the benefits of investing in International mutual funds, investment decisions should be made considering the pros and cons and the requirements of the particular investor. Although it appears to be a safe alternative, there are risks involved in every market-linked investment.
Not all international mutual fund schemes could be available to investors. There is an industry limit for foreign funds, as well as a distinct cap for each fund house raising funds for international funds. The entire amount of foreign investment in the mutual fund business is regulated at US$7 billion, according to SEBI regulations. Any mutual fund company may hold up to $1 billion USD in international investments. SEBI authorised AMCs to resume subscriptions and make investments in foreign funds and securities up to the headroom available as of June 17, 2022, without exceeding the foreign investment cap.
