International Mutual Funds Deliver Up to 83% Returns, Offers Options for Lump-Sum and SIP Investments

Global Markets Rebound, Leaving Indian Equities in Negative Territory

International investing has regained attention in recent times, with several overseas markets delivering significantly stronger returns than Indian equities over the past year. While the Nifty and Sensex slipped into negative territory, markets such as the US, Japan, Taiwan, and South Korea posted sharp gains, boosting returns from many international mutual funds available to Indian investors.

Despite the strong performance of international markets, access to these funds remains uneven. While some international schemes are accepting both lump-sum and SIP investments, several others continue to restrict fresh lump-sum inflows, allowing investors to enter only through SIPs. This has created an unusual situation where some of the best-performing international funds over the past year are not fully open for investment.

The Performance Gap Widens

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The contrast between Indian and global markets is striking. While Indian benchmarks delivered negative returns over the period, several overseas markets generated strong double-digit gains. Technology-heavy markets, in particular, led the rally, with the Nasdaq rising nearly 39 percent and Taiwan's benchmark more than doubling. This strong global performance has translated into healthy returns for several international mutual funds available to Indian investors.

Fully Accessible Schemes

Investors looking to build international exposure immediately still have a handful of options that remain fully open for fresh investments. Among the fully accessible schemes, Nasdaq-focused funds have delivered the strongest returns. The Motilal Oswal Nasdaq Q50 ETF topped the list with a one-year return of 72.51 percent, followed by the Motilal Oswal NASDAQ 100 ETF at 59.02 percent.

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SIP-Only Schemes

While the fully open funds have delivered impressive returns, an even stronger set of performers sits in the SIP-only bucket. Interestingly, the highest one-year return among all the schemes analysed came from the Edelweiss Emerging Markets Opportunities Equity Offshore Fund, which delivered 83.18 percent. China-focused, emerging market, and US technology funds also feature prominently among the top performers.

Trends and Takeaways

Three trends stand out from the numbers. Firstly, investors seeking global exposure today are largely gaining access to themes linked to US technology and developed markets, which have benefited from the strong rally in AI and technology stocks. Secondly, the recent performance of international funds highlights the diversification benefits of looking beyond Indian equities. However, industry experts say investors should avoid making allocation decisions based solely on one-year returns. International funds can be heavily influenced by geography-specific risks, currency movements, sector concentration, and local economic conditions. A fund's recent performance should therefore be evaluated alongside its investment mandate, portfolio composition, and role within an investor's broader asset allocation strategy.