International Funds: How Indians Can Invest Overseas

International funds let you own global businesses and economies from a domestic mutual fund platform. Used well, they add diversification, currency exposure, and access to themes not available in India.

What Are International Funds?

These are Indian mutual funds that invest in overseas markets. Structures vary: some invest directly in foreign stocks, many operate as a Feeder / Fund‑of‑Fund (FoF) into an offshore fund or ETF, and some track global indices via ETF FoFs.

Why Consider Global Exposure

1) Diversification

Reduce “home‑bias” by spreading across geographies, currencies, and sectors (e.g., global tech, healthcare, consumer brands).

2) Currency Tailwind

Part of returns can come from INR depreciation against USD or other hard currencies over long periods.

3) Unique Themes

Access to innovation and scale—FAANGs, semiconductors, cloud, biotech, clean energy, luxury, etc.

How Indians Can Invest Overseas (via Mutual Funds)

  1. Feeder / FoF route: You buy an Indian scheme that invests in a specific offshore fund or ETF (e.g., S&P 500, Nasdaq‑100, global sectors).
  2. International index/ETF FoFs: Indian schemes that buy units of a global ETF/index fund; you transact in INR on domestic platforms.
  3. Direct overseas route (LRS): Outside the MF scope, investors can use Liberalised Remittance Scheme to buy foreign ETFs/stocks directly. Consider costs, taxes, and platform reliability.

Key Risks & Notes

  • Currency risk: FX swings cut both ways.
  • Regulatory/limit risk: Overseas investment limits for the Indian MF industry can affect subscriptions/redemptions. Always check the latest AMC notices.
  • Taxation (India): Most international equity funds are not treated as domestic equity for tax (unless they hold sufficient Indian equity). Review current tax rules and the scheme’s KIM/SID.
  • Costs & tracking: FoF/feeder structures include fees of both the domestic scheme and the underlying fund/ETF; tracking error can occur.

Live Examples (Popular Choices)

U.S. Broad Market / Large‑Cap

U.S. Tech / Nasdaq‑100

Global Diversified / Multi‑Cap

Single‑Country / Thematic

How Much to Allocate?

A practical range for many long‑term investors is 10–20% of the equity allocation in international funds, depending on risk tolerance and goals. Rebalance annually and maintain SIP discipline.

Bottom Line

International funds offer simple access to global growth and diversification from India. Choose a broad market core (e.g., S&P 500) and add satellites (Nasdaq‑100, Japan, global themes) if needed. Check the scheme documents for limits, fees, and taxes before investing.

Education only, not investment advice. Scheme availability and limits can change—review the AMC’s latest notice/SID/KIM.