Why investing in international mutual funds can give you better returns

Mutual Funds investor often complain about not gaining as much as others even after doing proper research about the plan before investing. For such investors, experts say diversification of the fund is the major reason. As per the investment advisors, one should not just invest in those mutual funds whose fund managers invest in the Indian stock market only. They should add some international Mutual Funds so that when the Indian markets fail to deliver, those overseas markets come into play.

Elaborating upon what is international Mutual Fund and its benefits, Deepesh Raghav, Investment Advisor at PersonalFinancePlan.com told Zee Business TV, "The difference between Indian Mutual Funds and International Mutual Funds is quite simple. Those Mutual Funds whose fund managers invest in the Indian stock market only are considered Indian Mutual Funds while those funds whose fund managers invest in overseas stock markets too are called International Mutual Funds." 

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Raghav said that investing in International Mutual Funds is a sign of an investor who believes in extensive diversification and not just interested in getting the benefit of the national market but of the international markets too.

On how much one should opt into the International Mutual Funds while making his or her portfolio Raghav, "One can allocate around 10-15 per cent of his or her surplus funds into International Mutual Funds. Not more than that." He said that International Mutual Funds are subject to various indicators like rupee-dollar deviation, political set up etc. He said that generally a Mutual Fund investor gains when the rupee gains against the US dollar but in the case of International Mutual Funds, an Indian investor gains when the Indian National Rupee (INR) falls against the American dollar. So, when the Indian equity doesn't do well, International Mutual Funds help an investor to gain from the international stock market.

"Indian investors mainly invest in the US, European and to some extent into the emerging economies like Indonesia, Brazil etc.," he added.