International mutual funds have generated decent returns for their investors so far in 2023. The International mutual funds category has outperformed all mutual fund categories across different asset classes – equity, debt and gold. As of May 19, 2023, the average return of the International mutual fund category is 10.87%, while the next best category was Gold funds with returns of 8.97%.

Mirae Asset NYSE FANG+ ETF, Mirae Asset NYSE FANG+ ETF FoF, Mirae Asset Global X Artificial Intelligence & Tech ETF FoF, Edelweiss US Tech Eqt FoF, Nippon Ind Taiwan Eqt, DSP World Gold FoF Dir, Kotak Nasdaq 100 FOF, Motilal Oswal NASDAQ 100 ETF, Navi NASDAQ 100 FoF Dir, ABSL NASDAQ 100 FOF, ICICI Pru NASDAQ 100 Index and PGIM Ind Global Eqt Opp were some of the International mutual funds.

Mirae Asset NYSE FANG+ ETF and Mirae Asset Global X Artificial Intelligence & Tech ETF FoF topped the charts with 57% and 23% returns respectively over the last six months.

Also Read: Why are Indian investors not able to buy international mutual funds?

Within the International Mutual Fund category, the big surge in stock prices of tech stocks has contributed largely towards the spectacular returns so far. After the banking crisis in US regional banks, global investors flocked towards top US tech stocks, pushing prices up.

International funds help investors to manage risks and profit from currency devaluation by diversifying their domestic portfolio with exposure to international equities. While some international funds have limited exposure to global stocks, others have 100% exposure to foreign markets.

Also Read – How to invest in US stock market from India: All that you need to know about process, rules

New debt fund tax rules are in place from April 1, 2023, which will not only impact non-equity funds but also international mutual fund schemes. This is because international funds are treated as debt funds for the purpose of taxation. The debt funds, including international mutual funds, with less than 35 per cent exposure to Indian equities are taxed as per the investor’s tax slab.

(Date Source: Valueresearch Online)

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