Top 5 Overseas Mutual Funds in India Giving Returns of Up to 97% in One Year
Overseas mutual funds offer Indian investors a chance to invest in foreign markets, facilitating participation in international companies and economic growth. The funds give exposure to US technology companies, European blue-chip stocks, and Asian markets, allowing investors to take advantage of increasing global opportunities.
The last half year has been characterized by extraordinary volatility in worldwide equity markets. US trade tariff policies of the new government, geopolitical tensions, and foreign institutional investors relocating capital from India have influenced the domestic market. This decline has resulted in losses for most categories of mutual funds in the last three to six months. In the past year, asset classes like large-cap, small-cap, flexi-cap, and ELSS have failed to deliver double-digit returns. In spite of these challenges, international mutual funds have performed well in this time frame.
The average return of 67 funds in the category has been 14% for the past year. Except for mid-cap and multi-cap mutual funds, international funds are the only ones that have managed to post double-digit average returns. This good performance may spur more Indian investors to look at global investment opportunities when the domestic market is not performing well.
For those who want to invest in overseas markets, the following are five mutual funds that have given fantastic returns, some of which have given as much as 97% in the last year.
5 Overseas Mutual Funds in India Giving Fantastic Returns
1. Mirae Asset Hang Seng TECH ETF Fund of Fund
- 1-year return: 97.34%
- Fund size (AUM): Rs.102.93 crore (as of 28 February 2025)
- Benchmark: Hang Seng TECH TRI
- Launch date: 8 December 2021
This fund, being a fund of funds, allocates its assets to various mutual fund schemes rather than investing directly in securities.
2. Mirae Asset Hang Seng TECH ETF
- 1-year return: 64.17%
- Fund size (AUM): Rs.404 crore (as of 28 February 2025)
- Benchmark: Hang Seng TECH TRI
- Launch date: 6 December 2021
This ETF is passively managed and tracks the portfolio of its benchmark index.
3. DSP World Gold FoF
- 1-year return: 54.65%
- Fund size (AUM): Rs.1,058 crore (as of 28 February 2025)
- Benchmark: FTSE Gold Mines
- Launch date: 2 January 2013
This fund is a fund of funds and invests its money in various mutual fund schemes rather than directly investing in gold-based securities.
4. Nippon India ETF Hang Seng BeES
- 1-year return: 51%
- Fund size (AUM): Rs.869 crore (as of 28 February 2025)
- Benchmark: Hang Seng TRI
- Launch date: 9 March 2010
This passively managed ETF replicates the holdings of its benchmark index.
5. Mirae Asset NYSE FANG+ ETF FoF
- 1-year return: 43.69%
- Fund size (AUM): Rs.1,869 crore as of 28 February 2025
- Benchmark: NYSE FANG+ TRI
- Launch date: 10 May 2021
Since this scheme is a fund of funds, it invests in a set of mutual fund schemes and not directly in securities.
Why Consider Investing in International Mutual Funds?
Diversification minimizes risk through spreading investments in various countries and industries. Exposure to global investments enables one to partake in the growth of among the world’s top companies. Fluctuation in currency also gives extra returns when one invests in foreign currency. When there are domestic market declines, these funds can assist in keeping an investment portfolio stable.
For those interested in investing in assets beyond Indian markets, international mutual funds provide a suitable option. Nonetheless, all investments involve some level of risk, and proper research and finance consultation are needed prior to investment.
Costs Involved in International Mutual Funds
Investing in mutual funds comes with some charges. The expense ratio is one of the major expenses, and certain funds also charge entry and exit loads, i.e., a fee levied while withdrawing funds prior to a certain time frame. It is important to understand these charges prior to making an investment.
Taxation of International Mutual Funds in India
Taxation of international mutual fund gains varies based on the holding period. Short-term capital gains for holdings below 12 months are taxed at 20%, whereas long-term capital gains for holdings above 12 months are taxed at 12.5% without indexation advantage.
Assessing the Right Time to Invest
While the Indian market has seen a drop in the last six months, there are other international markets that have done well. In such a situation, diversification to international markets could be a strategic move. But investment decisions should be made after sound research and not merely based on market trends.
Considering International Mutual Funds
It is better to check international mutual fund investments every six months to one year. If there is persistent underperformance of a fund or changes in the international economy, changing the investment approach might be warranted.
Possible Risks of International Mutual Fund Investment
Like any investment, global funds have risks. Geopolitical tensions, currency fluctuations, and market volatility are some of the major concerns. Political or economic crises in a country where one has invested can affect fund performance. Currency risks occur if the Indian rupee appreciates, which can lower returns. Moreover, excessive volatility in some global markets can result in unstable fund performance.
Impact of Currency Exchange Rates
Because global mutual funds are invested in overseas assets, exchange rates between the Indian rupee and the specific foreign currency will directly influence returns. A high dollar can appreciate fund value, while a strong rupee can put downward pressure on returns. Knowing the pattern of currency exchange is crucial, particularly for long-term investments.
