Financial experts often recommend investors to diversify their portfolios to include different stocks, bonds, funds, etc., to cut down on risk and evenly distribute volatility. One way to do this is by including some foreign equity in your list of investments. There are many types of mutual funds online that can help you diversify your investment portfolio, chase high returns, achieve desired goals, and secure your future financially, and one of them is international mutual funds.
Here’s everything you need to know about these funds and why you should be open to investing in them.
What are International Mutual Funds?
International mutual funds are a type of mutual funds that invest in foreign companies or companies located outside your country of residence, in this case, outside India. These funds can expose you to more risk but also provide higher returns. There are several types of international mutual funds like thematic international mutual funds, region, and country-specific international mutual funds, etc.
International mutual funds can offer many benefits as listed below.
What are the Benefits of Investing in International Mutual Funds?
International mutual funds can benefit you in the following ways:
- They offer global exposure:Since these funds invest in foreign companies, you get exposure to opportunities outside India. International companies are not limited to a single market or geography. They enjoy a global reach and therefore have a higher chance of growing and earning profits.
- They let you diversify your portfolio:By extending the scope of your investments to international companies, you diversify your portfolio and reduce risk and volatility. Not all markets move in the same direction, and all markets are influenced by regional political and global events. So, if one market falls, it might not necessarily affect other markets. This way, you compensate for the losses made in one market by the profits earned in another.
- They offer expert management:Investing in foreign stocks on your own can be full of risk. You would require a deep understanding of different companies and markets and also need ample time to track their performance. However, if you invest in international mutual funds, the fund manager makes all decisions on your behalf and chooses the best funds that are customized to your financial needs and risk appetite.
- They provide ease and convenience:International mutual funds are hassle-free investments. The portfolio manager manages your investments. Details like account statements, dividends, etc., are sent to you via email. You can invest in a lump sum or opt for a SIP. These funds are also highly liquid.
To Sum it Up
Keeping all these benefits in mind, it is safe to conclude that international mutual funds are a great addition to your portfolio if you want to earn better returns and tap on global growth opportunities. So, go ahead and start investing in them as soon as you can. Do check out investment apps that can help in easily investing in international mutual funds like the moneyfy app.