Skip to main content

US focused MFs

 With seven US-focused MFs, Indian investors have several options
Even as the Chinese stock market crash, compounded by the eurozone's Greek debt crisis, has seen investor confidence shatter, the US continues to offer hope to those interested in foreign markets. With seven US-focused mutual funds, offering diverse investment routes--direct investment with active fund management, fund-of funds and ETFs--Indian investors have several options to choose from.

WHY INVEST IN THE US?

The US has the world's largest equity market. At $23 trillion, its market cap accounts for 36% of global market capitalisation. A quarter of the Fortune 500 companies have their headquarters in the US. Indian investors can also get exposure to unique investment themes, such as aerospace, semiconductor, consumer technologies, e-commerce, etc, not available in the domestic market. Also, the correlation between the CNX Nifty and the S&P 500 Index has been very low--0.29 over the past 10 years.

The low correlation between the Indian and the US equity markets results in more effective diversification of the Indian investor's portfolio.

Having exposure to both the markets lowers your portfolio volatility . For instance, if you had invested in the Sensex, your standard deviation--a measure of volatility--over the past 10 years would have been 25.65%. But if you had constructed a portfolio with 80% weight in the Sensex and 20% in the S&P 500 Index, the standard deviation would have been just 17.74%.

The likelihood of rupee depreciating against the dollar is another reason to invest in the US market. Many Indians will have dollar-based liabilities in the future with children's education or travel plans. Being invested in dollarbased assets will protect your portfolio.

If you are building your international portfolio country-wise, and not via a diversified international fund, then the US market should be your top priority .

DRAWBACKS AND RISKS

After several years of outperformance, valuation in the market is no longer cheap. Even if corporate profit margins do not revert to their historical mean, the current valuation levels appear stretched.

Currency movements also pose risks.The strengthening of the dollar against many of the world's currencies could affect corporate earnings in the US as almost 40% of the sales of S&P 500 companies are from abroad. Also, since all the US-focused funds have more than 65% of their portfolio invested in foreign funds or shares, they will be treated at par with debt funds for ax purposes in India. Which means you'll need to stay invested for at least hree years to avail of long-term capital gains benefit.

WHAT SHOULD YOU DO?

Despite the markets' elevated valuations, Indian investors should have some exposure to US funds in their long-term portfolios.

Investors should invest via SIPs and have at least a five-year horizon to overcome the risk arising from high valuation. Allocate 5-10% of your equity portfolio to these funds.


 


Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...
Read more

Financial Planner - Do Integrity & Dependability Check

How does one can find value proposition when it comes to financial planning, which is a new area? There is nothing to benchmark it with. So, how does one figure what is the right fee to pay? Look at what you want. You probably want to hire a financial planner to get a blueprint for your life ahead and want to know how to achieve your goals. For creating a tailor-made financial plan, our experience is that it takes 25-30 man-hours in all. Taking an average of Rs 500 per hour for hiring the services of a qualified financial planner like one who has a CFP(CM) certificate, the fee would come to Rs 12,500 to Rs 15,000. But the per-hour rate can be higher or lower depending on the process adopted, the experience and expertise of the planner, etc. That's how planners arrive at their fee. Now, is that value for money? For that you need to find out what benefits you would derive by engaging them. The financial plan will give you clarity, direction and pathway to achieve your goals. Th...
Read more

About CRISIL IPO Grading

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...
Read more

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...
Read more

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now