International Mutual Funds
April 26, 2021
These funds primarily invest in equity, equity-related instruments and debt instruments of companies listed outside of India, in stock markets of nations like USA, Canada, Brazil etc
US Equity Mutual Fund
The US equity mutual fund is a feeder fund that invests into a master fund, investing exclusively in US equity markets.
Types Of International MFs
The broad categories of international MFs are global funds, regional funds, country funds and global sector funds.
You get both geographical & portfolio diversification and can make the investment cost-effective by aligning the fund with your financial goals like funding a child’s education, marriage etc.
There is market risk involved based on the market fluctuations abroad. You also need to keep constant vigil, as fund managers may not track the foreign entity regularly.
Who Is It For?
International MFs are for those who wish to diversify, have the time to study global markets, have a fair understanding of risk, and are comfortable with market fluctuations.
Taxes: Short Term Capital Gains
If the holding period of the fund is less than 3 years, then capital gains will be taxed as per the investor’s tax slab (can be as high as 30% plus surcharge and cess).
Taxes: Long Term Capital Gains
If the holding period of the fund is more than three years, then capital gains will be taxed at 20% with indexation benefit.
International MFs have longer settlement period of 5 days, vs Indian funds which are settled in 3 days. It will take longer for the money to get credited to the investor account.
Top-Performing US Equity Funds
Two good funds to invest in include DSP US Flexible Equity Fund and Franklin India Feeder Franklin US Opportunities Fund.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.