2022 has been a washout year for the US technology stocks. Nasdaq 100, the index primarily comprising technology and communication stocks, is down by nearly 28% YTD in 2022. As an Indian investor looking to diversify across foreign stocks, some of the most popular stocks are Apple, Amazon, Tesla, Microsoft, Meta, and Google amongst others. However, other than the options available to take exposure in US stocks through an international trading platform, the window to buy international mutual funds in India is almost shut.
There are several mutual fund houses in India that offer international mutual funds to Indian investors. The total amount of offshore investment in the mutual fund sector is limited to a maximum of US$7 billion, in accordance with SEBI regulations. The maximum amount of overseas investments that any mutual fund house may have is $1 billion USD.
International mutual funds
ABSL Global Emrgng Opp
ABSL Intl Eqt A
ABSL NASDAQ 100 FOF
Axis Global Eqt Alpha FoF
Axis Grtr China Eqt FoF
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Axis NASDAQ 100 FoF
DSP Global Allocation
DSP US Flexible Eqt
Edelweiss ASEAN Eqt Off Shore
Edelweiss Emrgng Mkt Opp Eqt Offshr
Edelweiss Grtr China Eqt Off-shore
Edelweiss US Tech Eqt FoF
Franklin Asian Eqt Dir
Franklin Ind Feeder Franklin US Opp
Franklin Ind Feeder Templeton European Opp
However, to buy international stocks in dollars, the combined limit of $7 billion, was about to be breached by them. SEBI subsequently imposed a restriction on fund houses offering overseas funds from February 02, 2022.
The total upper limit of US$7 billion for the sector as a whole includes a separate upper threshold of US$1 billion for mutual fund schemes investing in ETFs (listed overseas) and they are still open to investors. However, the pricing of these ETFs may be a concern with restrictions in place.
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International mutual funds
HDFC Developed World Indexes FoF
HSBC Asia Pacific (ExJapan) Div Yld
HSBC Brazil
HSBC Global Emrgng Mkts
HSBC Global Eqt Climate Change FoF
ICICI Pru Global Advtg (FOF)
ICICI Pru Global Stable Eqt (FOF)
ICICI Pru NASDAQ 100 Index
ICICI Pru Strategic Metal and Energy Eqt FoF
IDFC US Eqt FoF
Invesco (I) Global Eqt Incm FoF
Invesco Ind-Invsco EQQQ NSDQ-100 ETF FoF
Further, from June 17, 2022, SEBI had permitted the AMCs to resume subscription and make investments in overseas funds/securities up to the headroom available without breaching the overseas investment limit as of February 01, 2022.
International mutual funds
Kotak Global Emrgng Mkt
Kotak Global Innovation FoF
Kotak Nasdaq 100 FOF Dir
Mirae Asset Global Electric & Autonomous Vehicles ETFs FoF
Mirae Asset Global X Artificial Intelligence & Tech ETF FoF
Mirae Asset Hang Seng TECH ETF
Mirae Asset Hang Seng TECH ETF FoF
Mirae Asset NYSE FANG+ ETF
Mirae Asset NYSE FANG+ ETF FoF
Mirae Asset S&P 500 Top 50 ETF
Mirae Asset S&P 500 Top 50 ETF FoF
The revision in the overseas investment limit may be the need of the hour. The US stock market provides ample opportunities to investors for diversifying and managing country risks. Currently, two things are not going in favour of US stocks, especially from the tech sector – one, the high valuation that they enjoyed in the low-interest rate regime is no more there as rates are going up, and secondly, the changing economic environment is putting pressure on their core business activities.
International mutual funds
Motilal Oswal MSCI Top100 Select Index
Motilal Oswal NASDAQ 100 ETF
Motilal Oswal Nasdaq 100 FOF
Motilal Oswal Nasdaq Q 50 ETF
Motilal Oswal S&P 500 Index Fund
Navi NASDAQ 100 FoF
Navi US Total Stock Mkt FoF
International mutual funds
However, any bounce back by these top-notch companies in their business operations cannot be ruled out. To a long-term investor, making allocations in them when the valuations have fallen is an opportune time.
Nippon Ind ETF Hang Seng BeES
Nippon Ind Japan Eqt
Nippon Ind Taiwan Eqt
Nippon Ind US Eqt Opp
PGIM Ind Emrgng Mkts Eqt
PGIM Ind Global Eqt Opp
SBI Intl Access-US Eqt FoF
Sundaram Global Brand
From mutual funds to Fund of Funds to ETFs, the global equity market offers diverse opportunities to build an international portfolio that can bring diversification to the domestic portfolio to the investor.
Read More: Why are Indian investors not able to buy international mutual funds?