The last six months have been extremely volatile for equity markets globally. US trade tariff policies in Trump 2.0, geopolitical tensions, and FIIs (foreign institutional investors) shifting capital from India jolted the domestic market. This market plunge led to most mutual fund categories suffering deep losses over the last three to six months. If we look at the 1-year returns of key fund categories, large-cap, small-cap, flexi-cap, ELSS, etc. they have barely been able to give double-digit returns in the last one year.
However, international mutual funds have performed better during this difficult period. The average return in the global funds (67 funds) category has been 14% in the last one year. Other than the international fund category, only the mid-cap and multi-cap categories saw average double-digit returns. This notable performance by international mutual funds may encourage Indian investors to consider investing in such funds, especially during a downturn in the domestic market.
International mutual funds allow Indian investors to invest globally, allowing them to participate in the growth of global companies and economies. Whether it is US tech companies, European blue-chip companies, or Asian markets, with these funds, one can take advantage of the growing opportunities of the international economy.
Also read: Does it make sense to invest in U.S. equity funds amid market volatility?
If you’re also looking to invest in international markets, check out this list of five mutual funds that have delivered returns of up to 97% in the last one year.
1. Mirae Asset Hang Seng TECH ETF Fund of Fund
Fund’s 1-year return: 97.34%
Fund size (AUM): Rs 102.93 crore (as on 28 February 2025)
Benchmark: Hang Seng TECH TRI
Fund’s launch date: 8 December 2021
Mirae Asset Hang Seng TECH ETF Fund of Fund, being a fund of funds, invests its assets in a set of mutual fund schemes instead of the underlying securities directly.
2. Mirae Asset Hang Seng TECH ETF
Fund’s 1-year return: 64.17%
Fund size (AUM): Rs 404 crore (as on 28 February 2025)
Benchmark: Hang Seng TECH TRI
Fund’s launch date: 6 December 2021
Mirae Asset Hang Seng TECH ETF, being passively managed, replicates the portfolio of its chosen benchmark index.
3. DSP World Gold FoF
Fund’s 1-year return: 54.65%
Fund size (AUM): Rs 1,058 crore (as on 28 February 2025)
Benchmark: FTSE Gold Mines
Fund’s launch date: 2 January 2013
DSP World Gold FoF, being a fund of funds, invests its assets in a set of mutual fund schemes instead of the underlying securities directly.
4. Nippon India ETF Hang Seng BeES
Fund’s 1-year return: 51%
Fund size (AUM): Rs 869 crore (as on 28 February 2025)
Benchmark: Hang Seng TRI
Fund’s launch date: 9 March 2010
Nippon India ETF Hang Seng BeES, being passively managed, replicates the portfolio of its chosen benchmark index.
5. Mirae Asset NYSE FANG+ ETF FoF
Fund’s 1-year return: 43.69%
Fund size (AUM): Rs 1,869 crore (as on 28 February 2025)
Benchmark: NYSE FANG+ TRI
Fund’s launch date: 10 May 2021
Mirae Asset NYSE FANG+ ETF FoF, being a fund of funds, invests its assets in a set of mutual fund schemes instead of the underlying securities directly.
(Data source: Value Research)
Also read: Top 5 cheapest silver ETFs in 2025
Why invest in international mutual funds?
Diversification: Reduces risk by spreading the investment across different countries and sectors.
Global growth advantage: One gets a chance to participate in the growth of big companies of the world.
Currency advantage: Investing in dollars or other foreign currencies can provide additional returns.
Risk balance: When the Indian market falls, these funds can help keep the portfolio stable.
If you do not want to limit your investment portfolio to just Indian markets and want to capitalize on opportunities globally, then international mutual funds can be a great option. However, every investment has some risks associated with it, so before investing in any fund, do thorough research and consult your financial advisor.
Charges associated with investing in international mutual funds
Whenever you invest in a mutual fund, there are some charges. Expense ratio is one of them. Apart from this, some funds also have entry and exit loads, that is, if you withdraw money early, you may be charged a small charge. So, before investing, make sure to understand these charges.
How are international mutual funds taxed in India?
In India, gains from international mutual funds are taxed based on the holding period, with short-term gains (held for less than 24 months) taxed at the investor’s income tax slab rate and long-term gains (held for over 24 months) taxed at 12.5% without indexation benefits.
Is this the right time to invest in international funds?
In the last six months, the Indian stock market has fallen, but some international markets have performed well. In such a situation, focusing on global diversification can be a wise move. However, do your own research before making any investment and do not make decisions just by looking at the trend.
How often should international mutual funds be reviewed?
If you have invested in international mutual funds, then do review it once every 6 months to 1 year. If a fund is consistently performing poorly or there is a major change in the global economy, then you should consider changing your strategy.
Also read: 5 Equity Mutual Funds with rising cash holdings amid market volatility
What are the risks of investing in international mutual funds?
Every investment carries risk, and international funds are no exception. Some of the major risks associated with them are geopolitical risk, currency risk and market volatility.
Geopolitical risk – If a country faces a political or economic crisis, it may impact your investment.
Currency risk – If the Indian rupee strengthens, it may hurt your returns.
Market volatility – Some international markets are very volatile, which may make your fund’s performance unpredictable.
Does currency exchange rate affect your returns?
International mutual funds invest in foreign assets, so the exchange rate of dollar and rupee has a direct impact on your returns. If the dollar strengthens, the value of your fund may increase. If the rupee strengthens, your returns may come under pressure. Therefore, it is important to understand currency exchange rates, especially if you are investing for the long term.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.
