Global - Other Mutual Funds

Are you looking for other avenues to invest apart from India? Well, the Global Mutual Funds can be the right option for you as you will get exposure to the biggest companies and the fastest growing economies of the world in one go. From technology giants in the US to emerging businesses across the globe, these funds help you access international markets through a single investment.

What are Global Mutual Funds?

Global Mutual Funds are mutual funds which invest in the securities of entities outside India. They allow Indian investors to invest in international markets without having to open an account abroad for this purpose.

These types of mutual funds invest their money in various countries, sectors, and industries according to the discretion of the fund manager.

Features of Global Mutual Funds

• Diversification: Make investments across a range of nations, thereby decreasing reliance on one particular economy.
• Exposure to International Brands: Get exposure to international brands which may not be available in India.
• Expert Fund Management: Expert fund managers do the analysis and manage the investments on your behalf.
• Portfolio Diversification: Spread investment risk across multiple geographies, sectors, and currencies.
• Opportunities for Long Term Growth: Investors can take advantage of long-term growth potential in international markets.

How to Invest in Global Mutual Funds?

You can invest in global mutual funds by following simple process:

Step 1: Choose investment mode. You can invest through:

• AMC websites
• Online investment platforms provided by stockbrokers
• Mutual fund distributors

Step 2: Choose a suitable global mutual fund.

Step 3: Choose between Systematic Investment Plan (SIP) and Lump sum based on your goal and make investment.

Step 4: Make payment through UPI, netbanking or other available methods.

Why to Invest in Global Mutual Funds?

• Portfolio Diversification: Minimise concentration risk by diversifying your investments among various countries and economies.
• Participation in Global Growth: Gain access to businesses and industries that are not necessarily present in the Indian market.
• Currency Diversification: Take advantage of the foreign currency exposure, which provides yet another level of diversification.
• Hedge Against Domestic Market Fluctuations: International investments can provide a way to balance out the performance of your portfolio in case of market fluctuations in India.
• Investment in Innovations: Make investments in industries like technologies, health care, artificial intelligence, and clean energy.

Taxation of Global Mutual Funds

Investment After 1 April 2023

In case of international mutual fund investments done within this period:

• Units that were sold within 24 months of acquisition of the investment were considered as Short Term Capital Gains (STCG) and were subject to taxation on the basis of income tax slab of the investor.
• Units that were sold after keeping them for 24 months or more were considered as Long Term Capital Gains (LTCG) and the tax rate was 12.5%.

Investments Made Before 1 April 2023

• Capital gains were treated as long-term capital gain after the period of more than 36 months.
• Long-term capital gains would be taxed at 20% with the benefit of indexation.
• Investment held for less than 36 months would have been taxed based on income tax slab.