What are International Funds? Should You Invest?

International mutual funds invest in global markets like the US, China, or Europe. Learn how they work, their pros and cons, and if they deserve space in your portfolio.

05/06/2025

Introduction

Introduction You buy products from Apple, Google, and Tesla — but have you ever thought of investing in them?

International mutual funds let you do just that — without opening a foreign account. But are they worth it? This blog explains how they work, their pros/cons, and whether they’re a good fit for your investment plan.

What Are International Funds?

Invest in foreign equity or mutual funds (like Nasdaq 100, S&P 500, etc.)
Can be:

Global (across countries)
Regional (e.g., US, Europe, China)
Thematic (e.g., global innovation, tech)

Real-Life Example: Priya’s Global Bet

Priya, an NRI returning to India, wanted to stay invested in global stocks. She chose a US-focused fund in 2019.
She earned 17% CAGR from 2019–2021, but in 2022, tech correction + USD-INR fluctuation led to a 15% dip.
However, her 5-year CAGR still stands at 12.8%, beating Indian large caps.

Why Consider International Funds?

Reason	Benefit
Global diversification	Reduce home country risk
Currency hedge (USD exposure)	Good for education abroad goals
Exposure to global innovation	Invest in Amazon, Google, etc.

🌍 Don’t ignore global opportunities

💡 Limit allocation to 10–15%
📉 Be ready for currency + market risk

Summary Table: International Funds

Fund Type	Avg Return (5-Yr CAGR)	Avg Risk	Avg Investor Behaviour
US-Focused Fund	11% – 13.5%	High	Tech-favoring, macro-sensitive
Global Diversified	10% – 12%	Medium to High	Long-term, goal-oriented investors
Indian Large Cap	9.5% – 11%	Medium	Conservative investors, home bias

Dr.Satish Vadapalli
Research Analyst

What are International Funds? Should You Invest?

Introduction

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