According to Value Research, a mutual fund tracking entity, International equity funds as a category have been successful over last one year by restricting losses to 3.52% outperforming other categories of diversified equity funds. Multi Cap and large cap funds as a category have lost 9.55% and 10.56% over one year.
Though Indian equity markets are weak for some time now with Nifty losing 11.41% and 11.71% over last one year and three months respectively, US dollar is the another reason for such outperformance by international funds. "Weak rupee does help funds holding dollar denominated assets and shows improvement in performance," says Hiren Dhakan, associate fund manager, Bonanza Portfolio.
The case in point is Motilal Oswal Most Shares NASDAQ-100 ETF. It has delivered 31.14% returns over one year leaving behind most Indian diversified equity funds. The fund is an index fund and tracks NASDAQ-100 index. Over last three months the fund has delivered 9.55% returns when the underlying index is down 1.57%. The upside the fund has seen is an outcome of weak rupee against dollar.
Another fund from the international fund category that has done well with 11.70% is ING Global Real Estate Fund followed by Birla Sunlife International Equity Fund with 6.92% yearly return. "This may not be a great entry point in these funds, as global macro economic scenario is not encouraging and rupee is at a low against USD. Any positive move in rupee against USD, may wipe out returns offered by these funds," add Hiren Dhakan.
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'I made my money by selling too soon.'
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