Global Mutual Funds – Willing to Buy?
Diversification is the name of the game when it’s about investment, right? If you are looking to make good profits in the global market, then global mutual funds can turn out to be a vital tool in your kitty. But before that let’s understand what exactly the GLOBAL MUTUAL FUNDS are. Here:
WHAT ARE GLOBAL MUTUAL FUNDS?
Like said, a Global mutual fund is an investment tool that allows investing in ‘International Markets’. To simplify, it can be described as an exchange-traded fund which primarily invests in enterprises/companies which are spread globally.
GLOBAL MUTUAL FUNDS ARE SAME AS INTERNATIONAL FUNDS?
Nope! Here is an important difference that every investor should know about it. A global fund will invest in all markets (including investors’ own country). Whilst, on the other hand, an international fund invests only in foreign markets.
BENEFITS OF INVESTING IN GLOBAL MUTUAL FUNDS
They are great for investors who are eagerly looking to diversify their portfolio. It helps in risk-management, and by investing in different markets you can earn good profits. The time-period for investing in a global mutual funds is a bit more, thus, making it suitable for long-term investments.
- Risk-factor: Investing in stable markets reduce the risk-factor whereas in international markets, the risk depends on market conditions and country-specific policies.
- Diversification: The objective of investing in global mutual fund is to diversify the investment portfolio of an individual. These funds invest in different securities in different countries, generally, creating a vast range of investment instruments.
- Hedge: A global mutual fund functions as a hedge against ‘inflation’.
- Term: Mostly, they are long-term funds.
- Returns: The returns can vary owing to different parameters like global politics, currency exchange, etc.
- Currency factor: Fluctuations in an international currency might have a vast impact on the performance of a global mutual fund, but these are not so frequent, therefore, the risk is moderate.
WHY SHOULD YOU INVEST?
- Investing in mutual funds is the fastest growing markets globally, thus, helping you earn rich rewards.
- If you are investing from a different country, then your investment(s) are protected against the ups-downs in your home country.
- Investing in foreign currency can help you earn good, thus, meeting your future needs and requirements.
HOW ARE THESE TAXED?
It’s important to take consideration that the international funds are taxed as if they were ‘non-equity funds’. Therefore, gains from international funds are taxed at a marginal rate only if they are sold within a span of three years (from the purchase date). The profits from the sale after 3 years are eligible for indexation (10% without indexation and 20% with indexation).
TOP 5 GLOBAL MUTUAL FUNDS
|Franklin Asian Equity Fund|
|DSP BlackRock US Flexible Equity Fund|
|Principal Global Opportunities Fund|
|Reliance Japan Equity Fund|
|Franklin India Feeder – Franklin US Opportunities Fund|
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.