Thursday, May 19, 2022
Home Business D-Street to Wall-Street: Investors bet on foreign cos via MFs

D-Street to Wall-Street: Investors bet on foreign cos via MFs


(This story originally appeared in on Sep 25, 2021)

Several Indians are investing in international markets like the US and China through the mutual fund (MF) route in a bid to diversify their portfolios. Strong market rallies and appreciation of foreign currencies are other factors contributing to rising flows in the niche category, a trend that has picked up in the last couple of years.

Most major asset management companies offer mutual funds that invest in stocks listed abroad, including through fund of funds (FoF), exchange-traded fund (ETF) structures. Investing in foreign companies like Amazon and Alibaba through mutual funds turns out to be cheaper than buying their stocks directly for Indian investors.

RBI data released last week showed that investments made by Indian mutual funds in foreign stocks jumped over three and half times in FY21 to Rs 20,865 crore from Rs 5,808 crore at the end of March 2020. The launch of several new funds this year is expected to give a further boost.

A combination of factors, including new entrants into the market, has led Indians to explore options to invest outside India in the last one and half years, according to Niranjan Avasthi, head of product marketing and digital business at Edelweiss Mutual Fund. “Overall, investing has taken off. People have also realised there are good opportunities to invest outside India…it could be because of fund returns, awareness campaigns,” Avasthi said.

According to Ashwin Patni, head of products and alternatives head at Axis Mutual Fund, though there will be a home market bias, the share of allocation to international funds will grow to about 10% in five years. “We (investors) understand the opportunities the Indian market presents better, so we will always prefer to have a large allocation to the domestic market. There was virtually zero allocation to global markets, so from there it will move to a more material number, eventually, 15-20% of capital will go to non-home markets,” Patni said.



Source link

RELATED ARTICLES

TRS sitting on cash pile of Rs 425 crore

TRS president and Telangana Chief Minister K Chandrasekhar Rao on Monday said the party has fixed deposits of Rs 425 crore which it...

RBI Governor Says Robust Auditing Practices Will Help Counter Frauds

<!-- -->RBI Governor has asked auditors to be alert about manipulations in accounting practicesReserve Bank of India (RBI) Governor Shaktikanta Das on Monday...

Transferring money online? Here’s everything you need to know about IMPS, NEFT, RTGS and more

New Delhi: The Reserve Bank of India (RBI) recently increased the Immediate Payment Service (IMPS) transaction limit from Rs 2 lakh to Rs...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Nikhat Zareen dominates in victory, enters boxing World Championships final

Her high energy in the ring and punches unleashed at furious pace mark her out. On Wednesday night in Istanbul, Nikhat Zareen was...

Ravi Shastri: ‘Promise you, Umran Malik will be a handful in red-ball cricket’

Umran Malik needs to be given a central contract "straightaway" by the BCCI, in the opinion of Ravi Shastri, who also believes Malik...

Kidambi Srikanth enters second round of Thailand Open

Srikanth, seeded eighth in the BWF Super 500 tournament, won the first round match 18-21 21-10 21-16 in 49 minutes. Fresh from playing a...

‘The old Bajrang will be back soon’

It was not all smooth sailing for Bajrang Punia as he qualified for the Commonwealth Games and will defend his title in Birmingham....

Recent Comments