Funds Investing in US Stocks Outperform the Nifty Easily
Investments in US returned about 2.50% last fiscal as Nasdaq gained 9.48%, Nifty saw a fall of 8.86% during the same period
Mumbai: At least six funds focused on investing in the US have outperformed the broader index Nifty by a wide margin as their exposure to a few stocks such as Apple and Google helped them race ahead of their domestic counterparts.
In the last financial year, such investments returned about 2.50% on an average while the benchmark index 50-share Nifty has actually registered an investment erosion of 8.86%, show data from Morningstar, a mutual fund research organisation. During this period, Nasdaq returned 9.48%.
“By investing through our funds in the US, you get a chance to invest in some hot ideas like Google, Walt Disney, Amazon, Apple, Facebook, sitting here in India,” said Anand Radhakrishnan, chief investment officer at Franklin Equity, Franklin Templeton Investments - India. “Moreover, investors can also increase their investment when the rupee is falling against the dollar.”
“People who need dollar flows in future also invest in such schemes as it gives them protection against exchange rate volatility,” he said.
In the past three years, those US investing funds have returned 19.4% CAGR against 10.8% in the N S E N i f t y, according to Morningstar data.
Franklin holds the highest assets under management at ₹ 690 crore as on March 31, 2016, in the category, followed by ICICI Pru at ₹ 172 crore.
“Investors should look at investing 10-15% of their equity portfolio in such global schemes, aimed at portfolio diversification,” said
Kaustubh Belapurkar, director - fund research, Morningstar India. “Some high net worth savvy investors prefer to invest in those funds.”
Total assets under management have trebled in the past three financial years to ₹ 1,082 crore from ₹ 357 crore as on March 31, 2013, according to Morningstar data.
Since April last year, those US in- vesting funds have outperformed the benchmark Nifty on a year-onyear basis. Between November and March this year, they have delivered stellar performance. For instance, those funds returned 8.67% yearon-year in November, against a 7.60% investment erosion in Nifty.
The six funds that invested in
stocks in the US include Franklin Ind Feeder-Frank US Opportunity (growth), ICICI Prudential US Bluechip Equity (Regular growth), JPMorgan US Value Equity Offshore (Regular growth), Motilal Oswal Most Shares NASDAQ 100 ETF, Kotak India US Equity Fund (growth.), Reliance US Equity Opportunities (Regular growth).