1. For very long-term equity investors who are in the process of wealth creation through equity route, especially MFs, either to fulfill identified goals or to build a retirement nest, global investment through Indian MFs is suicidal, when compared with pure domestic mutual funds of all popular categories, viz. Balanced, ELSS, Multicap and Large-, Mid- and Small-cap funds.
2. Returns of international funds are susceptible to unpredictable currency risks, as investors subscribe in rupees, but MFs invest in assets that are denoted in foreign currency.
3. Keeping track of a foreign economy's or company's outlook is more difficult due to lack of precise information.
4. Geopolitical risk exists depending on its geographical or country-specific mandate.
5. There is a lack of passive funds for executing all global investment strategies.
6. Over the longer period, a mature market like the US may not be able to beat the returns from emerging markets like India, where economic growth is likely to remain faster.
7. While global funds are equity in nature, tax treatment is non-equity currently.
8. When investing through feeder funds, you are totally dependent on the parent fund to choose the right combination of schemes for you, which may not necessarily suit your own risk profile.
9. The top 5 international funds have always under-performed their domestic counterparts significantly in all the terms, viz. short, medium and long, by 5-10% CAGR or even more, which cannot be ignored while creating and accumulating wealth from one's hard-earned limited resources, even for diversification sake.
2. Returns of international funds are susceptible to unpredictable currency risks, as investors subscribe in rupees, but MFs invest in assets that are denoted in foreign currency.
3. Keeping track of a foreign economy's or company's outlook is more difficult due to lack of precise information.
4. Geopolitical risk exists depending on its geographical or country-specific mandate.
5. There is a lack of passive funds for executing all global investment strategies.
6. Over the longer period, a mature market like the US may not be able to beat the returns from emerging markets like India, where economic growth is likely to remain faster.
7. While global funds are equity in nature, tax treatment is non-equity currently.
8. When investing through feeder funds, you are totally dependent on the parent fund to choose the right combination of schemes for you, which may not necessarily suit your own risk profile.
9. The top 5 international funds have always under-performed their domestic counterparts significantly in all the terms, viz. short, medium and long, by 5-10% CAGR or even more, which cannot be ignored while creating and accumulating wealth from one's hard-earned limited resources, even for diversification sake.