International funds clock 16.49% returns in 3 months. What would be a good strategy?

Investment strategy for international funds

Investment strategy for international funds

Mutual funds that invest in international indices or other international funds are called international mutual funds. These funds allow you to invest in international markets and diversify your portfolio geographically. Moreover, you can enjoy attractive returns when global economies grow.

In recent times, international mutual funds have been delivering impressive returns due to rising global indices. These funds have delivered up to 16.49% returns in the last three months, topping the list among other funds. On the other hand, international indices have delivered returns ranging from 4% to 22%.

Here’s a look at the top 5 international funds in terms of returns –

 top 5 international funds

Should you invest in international funds?

If the returns attract you to invest in international funds, you should understand whether these funds make sense. Here’s a quick assessment –

Why invest in international funds?

 

  • Portfolio diversification
    As mentioned earlier, international funds offer portfolio diversification and allow you to invest in international markets. This can be a good reason to invest in these funds as you can expose your portfolio to the international economy and mitigate investment risks.

 

  • Long-term return potential
    As international economies are recovering post the pandemic, there’s growth potential. You can capitalize on this potential through a long-term perspective. Though the funds offer attractive short-term returns, long-term investment smoothens short-term volatility risks and helps you earn good returns.

 

  • Varied portfolio choices
    International funds offer various investment options like commodities, indices, gold, mining, etc. You can, thus, choose the sector based on your investment strategy.

Things to remember when investing in international Mutual Funds

  • Portfolio limit
    International funds have an overall investment limit of $7 billion. Once the limit is reached, the AMC does not allow fresh investments. So, in some cases, you might be unable to invest in these funds if the portfolio limit is reached.
     
  • Mode of investment
    SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) are better for investing in international funds rather than a lump sum. This will help you avoid market volatility and benefit from rupee-cost averaging.
     
  • Type of scheme
    Though there are a range of schemes to choose from, investing in index funds or Fund of Funds (FoFs) is a better alternative as they give you a diverse basket of securities and reduce the investment risk.

Related - Know how you can invest in international markets using Fund of Funds (FoFs)

The bottom line

Analyse the potential of international funds, and then you can invest in these schemes to bank on their returns and diversify your portfolio.

Related - Know the proportion in which international funds should be allocated

Check out these top 5 international mutual funds.

Mutual funds that invest in international indices or other international funds are called international mutual funds. These funds allow you to invest in international markets and diversify your portfolio geographically. Moreover, you can enjoy attractive returns when global economies grow.

In recent times, international mutual funds have been delivering impressive returns due to rising global indices. These funds have delivered up to 16.49% returns in the last three months, topping the list among other funds. On the other hand, international indices have delivered returns ranging from 4% to 22%.

Here’s a look at the top 5 international funds in terms of returns –

 top 5 international funds

Should you invest in international funds?

If the returns attract you to invest in international funds, you should understand whether these funds make sense. Here’s a quick assessment –

Why invest in international funds?

 

  • Portfolio diversification
    As mentioned earlier, international funds offer portfolio diversification and allow you to invest in international markets. This can be a good reason to invest in these funds as you can expose your portfolio to the international economy and mitigate investment risks.

 

  • Long-term return potential
    As international economies are recovering post the pandemic, there’s growth potential. You can capitalize on this potential through a long-term perspective. Though the funds offer attractive short-term returns, long-term investment smoothens short-term volatility risks and helps you earn good returns.

 

  • Varied portfolio choices
    International funds offer various investment options like commodities, indices, gold, mining, etc. You can, thus, choose the sector based on your investment strategy.

Things to remember when investing in international Mutual Funds

  • Portfolio limit
    International funds have an overall investment limit of $7 billion. Once the limit is reached, the AMC does not allow fresh investments. So, in some cases, you might be unable to invest in these funds if the portfolio limit is reached.
     
  • Mode of investment
    SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) are better for investing in international funds rather than a lump sum. This will help you avoid market volatility and benefit from rupee-cost averaging.
     
  • Type of scheme
    Though there are a range of schemes to choose from, investing in index funds or Fund of Funds (FoFs) is a better alternative as they give you a diverse basket of securities and reduce the investment risk.

Related - Know how you can invest in international markets using Fund of Funds (FoFs)

The bottom line

Analyse the potential of international funds, and then you can invest in these schemes to bank on their returns and diversify your portfolio.

Related - Know the proportion in which international funds should be allocated

Check out these top 5 international mutual funds.

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