If you feel that your portfolio is adequately diversifi ed across shares of various market caps and industries in India, you may consider investing abroad through international MF schemes. There are two broad categories of such schemes. The fi rst invests partly in Indian and partly in foreign markets. This lot typically invests at least 65 per cent in Indian securities and the rest in international equities, as income tax rules mandate investments of at least 65 per cent in Indian securities to retain the equity tax advantage. The second category is of funds that are purely international as they invest their entire corpus internationally. They can either invest in international schemes run by their foreign parents, or trade in international stocks directly.
Risks. While the fund's success rests on the quality of fund management, much like any domestic MF scheme, the added dimension of currency risk is inherent in international schemes. The movement of the Indian rupee against the US dollar also affects the performance of your fund.
