Time to spread bets overseas

As equity valuations turn expensive amid the record breaking rally, financial planners are telling investors to diversify their stock portfolios globally and allocate 10-15% of their holding overseas over the next two years. Global markets have a low correlation with Indian stocks and help reduce risk. For instance, Indian markets have a 0.16% correlation with Wall Street, 0.25 with the World and 0.32 with Europe. ET spoke to financial planners, who suggested five funds that could be part of international asset allocation.PGIM India Global Equity Opportunities Fund:AUM : Rs 1,269 croreTop holdings: Wuxi Biologics, Amazon, Apple, Tesla and LVMH Moet Hennessy-Louis VuittonOne year returns : 33.8% Financial planners believe investors looking for an unconstrained concentrated global equity portfolio that holds between 35-45 stocks diversified across sectors and industries could consider this fund. The strategy seeks to outperform the MSCI All Country World Index by building a portfolio of companies from around the world believed to be new market leaders with sustainable competitive advantages and strong financial characteristics. The fund manager seeks to capture the inflexion point in a company’s growth rate driven by disruptive technologies or services, new product cycles and expanding addressable markets.Axis Global Equity Alpha Fund of Fund:AUM: Rs 1,521 croreTop holdings: Alphabet, JP Morgan Chase, Microsoft, Amazon, FacebookOne year returns: 30%Investors looking for a compact high conviction portfolio of stocks, diversified both geographically and sectorally, can consider this fund. This fund manager uses bottom-up fundamental research to find and invest in quality growth companies with a sustainable competitive advantage. Managed by Schroders, the scheme eyes the growth gap and looks for companies where the forward earnings growth is not yet identified by the market.ICICI Global Advantage Fund of Fund :AUM: Rs 166 croreTop holdings: Nippon India ETF Hang Sang BeEs, Franklin Asian Equities, ICICI Prudential US Bluechip Equity fundOne year returns: 20.65%Investors looking for allocation across markets can consider this fund of funds. It is well-diversified across both developed (DMs) and emerging markets (EMs). The scheme scores as it gives the fund manager flexibility to spread bets across several geographies and vary allocations. It has a 51% allocation to EMs and 49% to DMs through schemes investing in such economies.Motilal Oswal S&P 500 Index Fund:AUM: Rs 1,621Top holdings: Apple, Microsoft, Amazon, Facebook, Alphabet Class AOne year returns: 32.3%Investors looking to build their international portfolio and eyeing a low-cost simple fund can use this broad-based index fund. The S&P 500 Index accounts for 82% of the US market capitalisation and is one of the best proxies to international diversification of portfolios. It is a diversified index with the tech sector accounting for one-fifth of the index, with financials coming in next at 11.7%.Edelweiss US Technology Fund of Fund:AUM: Rs 1,701 croreTop holdings: Facebook, Alphabet, Advanced Micro, Synopsys, Lam ResearchOne year returns: 40.18% High-risk investors looking at US technology companies with a global focus could consider investing in this fund. Earnings of US technology companies have outpaced the rest of the world and the fund invests in many of the transformational technologies that are in the early stages of adoption. The fund invests in current technology megatrends like cloud computing, AI, OTT, electronic payments, autonomous cars and 5G technology.

Article Source and Credit economictimes.indiatimes.com https://economictimes.indiatimes.com/mf/analysis/time-to-spread-bets-overseas/articleshow/85360242.cms Buy Tickets for every event – Sports, Concerts, Festivals and more buytickets.com