Global funds like Franklin US Opportunities have returned 41 per cent, ICICI Prudential US Bluechip Equity 38 per cent and DSPBR US Flexible Equity 36 per cent.
Global funds give diversification and participation in equity assets in foreign countries. This diversifies the geographical risk of investing only in rupees, as investors get exposure in dollars and other currencies. Thus, investors not only get exposure to foreign equity assets, but can also hedge some of the risk if the rupee falls.
Experts back global funds as a way to diversify one's portfolio. Renu Pothen, head, research, at Fundsupermart, says these are making up for poor domestic market performance. "One takes a long-term view and with a horizon of at least three to five years when investing in these."
Investing 10 to 15 per cent of your portfolio in these is a good way to diversify, says Dhruva Chatterji of Morningstar India Research. "Over the past year, we are seeing emerging markets like India under-perform most developed ones. Diversifying in another economy helps the portfolio make money." He says those with a lower appetite for equity assets should not take this route.
These also give exposure to themes such as global agriculture or south American equity or equity exposure to the US market. Hence investors will have to keep a track of where they want to invest and in which countries they would like an equity exposure. Sanjay Sinha of Citrus Advisors says one should look at the underlying theme and the geography before making an investment. "If one decides to invest in a geography, the investor would need to keep a track of it."
This year, many fund houses filed offer documents to the Securities and Exchange Board of India (Sebi) to launch global schemes.
Experts say ideally one should invest in dollar-denominated funds that invest in equity assets abroad. One should also track the investments in foreign assets on a yearly basis. Besides, financial planners say global funds should not exceed 10-15 per cent of one's portfolio.
However, these funds can also be used to hedge against currency risk for goals such as education abroad. "This is a good way to hedge for goals like saving for a child's foreign education some years down the line," says Pothen. But you need to have a long-term view of at least five years when you link investments in global funds for goals like foreign education, as timing currency movement may not be easy. Source BS www.keralites.net 
To subscribe send a mail to Keralites-subscribe@yahoogroups.com.
Send your posts to Keralites@yahoogroups.com.
Send your suggestions to Keralites-owner@yahoogroups.com.
To unsubscribe send a mail to Keralites-unsubscribe@yahoogroups.com.
Homepage: http://www.keralites.net
No comments:
Post a Comment