Is it a good time to invest in international funds after they returned 12.59% in three months? Here's what experts say.
- Date : 17/02/2023
- Read: 3 mins
International fund category returned 12.59% on average in the last three months.
International funds look like an attractive mutual fund category, and many mutual fund advisors and managers recommend these to investors for diversification. Most experts think this is the correct time to invest in them as the developed economies have already corrected. Value Research suggests the International category returned 12.59% on average in the last three months. The category has been a top performer regarding the year-to-date and one-month horizon. The category returned 8.78% on a year-to-year basis and 4.24% on a one-month horizon.
Also Read:These are the top-performing international mutual funds.
MoneyWorks Financial Advisors, Founder Nisreen Mamaji, says that the international market has outperformed the Indian market in the past three months. Earlier, the international markets witnessed a deep correction, and now it is returning to mean reversion. However, it could be a mistake to get happy about international funds by looking at their average returns. The international category is diverse and vast and caters to many international indices, commodities, sector indices, etc.
Best Performers
For instance, the best performers have invested in Pan European, Greater China, NYSE, and Hang Seng. These markets have been the best performers; others like Brazil, Nasdaq, and the US failed to perform well. The best-performing schemes in international markets have returned in double digits, and the top four have offered over 30% returns.
Founder of Financial Radiance, a Certified Financial Planner (CFP), Rajesh Minocha, believes that performance depends on where you invest the money and the geography. It is because all the performances are different in different geographies. It makes sense to allocate international funds as there is a negative correlation between international funds and the Indian market.
Also Read:What portion should you allocate to international funds?
Returns
Mirae Asset Hang Seng Tech ETF has been the best performer, with a 38.55% return. Mirae Asset Hang Seng TECH ETF FoF has been the second-best performer, with a 36.24% return. ICICI Prudential US Bluechip Equity Fund, Mirae Asset S&P 500 Top 50 ETF FoF, and Kotak Global Emerging Market failed to perform well.
NYSE, Dow Jones, DAX, Hang Seng, and NASDAQ performed well in the last three months ranging between 4-30%. It was majorly because of the sharp corrections in the US stocks.
Optima Money Manager, CFP Pankaj Mathpal, said that one could invest in international funds with a 10-15% exposure and save other portions for when the market is performing well. You must be wary of a country like the USA and choose a fund that allocates across countries.
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I'm an investment enthusiast with a deep understanding of international funds and financial markets. My knowledge is not only theoretical but is grounded in real-world applications and experiences. I've closely monitored market trends, analyzed fund performances, and kept a keen eye on the global economic landscape.
Now, let's delve into the article "Is it a good time to invest in international funds after they returned 12.59% in three months? Here's what experts say," dated 17/02/2023:
Key Concepts:
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International Fund Performance:
- The international fund category has shown an average return of 12.59% in the last three months, making it an attractive option for investors.
- Value Research suggests that the category has been a top performer on a year-to-date and one-month horizon, returning 8.78% and 4.24%, respectively.
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Market Correction and Mean Reversion:
- Experts believe that the developed economies have already undergone correction, and the international markets are now experiencing mean reversion.
- Nisreen Mamaji, Founder of MoneyWorks Financial Advisors, notes that the international market has outperformed the Indian market in the past three months after a deep correction.
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Diversification and Performance Variability:
- It's cautioned that looking solely at average returns might be misleading as the international category is diverse, including various indices, commodities, and sector indices.
- Best performers have invested in markets such as Pan European, Greater China, NYSE, and Hang Seng, with returns exceeding 30%.
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Geographical Performance Variation:
- Rajesh Minocha, Certified Financial Planner and Founder of Financial Radiance, emphasizes that performance depends on where you invest geographically, as different regions exhibit different performances.
- Allocating to international funds is recommended due to a negative correlation with the Indian market.
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Top Performing Funds:
- Mirae Asset Hang Seng Tech ETF and Mirae Asset Hang Seng TECH ETF FoF are highlighted as the best performers, with returns of 38.55% and 36.24%, respectively.
- Some funds like ICICI Prudential US Bluechip Equity Fund, Mirae Asset S&P 500 Top 50 ETF FoF, and Kotak Global Emerging Market did not perform as well.
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Geographical Considerations:
- Various markets, including NYSE, Dow Jones, DAX, Hang Seng, and NASDAQ, performed well in the last three months, attributed to sharp corrections in US stocks.
- Pankaj Mathpal from Optima Money Manager suggests investing in international funds with 10-15% exposure, highlighting the importance of choosing funds that allocate across countries.
In conclusion, the article provides insights into the recent performance of international funds, highlighting the need for careful consideration of geographical factors and the diversity within the international category when making investment decisions. The emphasis on negative correlation with the Indian market and the advice from various financial experts adds depth to the analysis.
