Domestic mutual fund schemes that can give you indirect access to global markets

Indian equity markets have been on a dream run over the past few years, delivering double-digit returns and creating wealth for long-term investors. Consider this: over the period of 10 years, Nifty 50 has given a return of 12% while the 5-year return is 19%.

However, history has shown that no market outperforms forever. Periods of high growth are often followed by phases of consolidation or even underperformance. For instance, over the period of one year Nifty 50 has given a return of 0.5%. This is where diversification across geographies can help—reducing the risk of overdependence on a single economy while opening the door to global growth opportunities.

Why look overseas?

Investing outside India provides exposure to sectors and companies that may not have a strong presence in the domestic market.

For example, if you want to invest in global technology leaders like Apple, Microsoft, or Nvidia, or healthcare innovators like Pfizer and Johnson & Johnson, you need international exposure. While India has its share of IT and pharma players, the scale, innovation cycles, and market dominance of these global firms are unmatched.

Domestic mutual fund schemes that can give indirect access to global markets

Moreover, economic cycles differ across countries. If the Indian market slows down due to domestic factors—policy changes, inflationary pressures, or political uncertainty, global markets may still offer growth opportunities, balancing your portfolio’s performance.

“Most foreign markets -especially emerging economies like Korea, Brazil, Taiwan, and China—are trading at cheap valuations and have severely underperformed India over the past decade and a half. This valuation gap presents an interesting opportunity for long-term investors who can look beyond domestic equities,” said S Naren  speaking exclusively on The Wealth Podcast of Moneycontrol.

The US markets have given the return of 21.6% over the last one year while China Shanghai and Korea Kospi has given the return of around 24%.

The hurdle: investment limits

Over the last couple of years, Indian mutual funds with a mandate to invest overseas have faced restrictions under the Reserve Bank of India’s $7 billion overseas investment limit for the mutual fund industry. Many popular international funds have stopped accepting fresh inflows as they have already reached their limits.

For retail investors, this has created a perception that international investing is closed. But this isn’t entirely true. While dedicated international funds are often shut for subscriptions, there are domestic funds with global allocations still open for investment.

Rajul Kothari of Capital League advises, “Given the limited number of international funds currently open for subscription, investors can remain predominantly domestic-focused for now. That said, having 5–10% of one’s portfolio in global equities offers valuable geographic diversification, especially with the rupee’s long-term depreciation trend. For those seeking international exposure, select domestic funds such as Parag Parikh Flexi Cap and DSP Multi Asset Allocation offer indirect access to global markets and can serve as effective vehicles within a diversified portfolio.”

The backdoor to global markets

A closer look at data from July 31, 2025, shows several schemes with meaningful international exposure that remain open for investment.

For instance, the Edelweiss Technology Fund has the highest global allocation at 28.8% of its total assets, offering exposure to top global tech companies such as Nvidia Corporation, Microsoft Corp, and Apple. The fund has given a return of 4% over the last year. Similarly, the DSP Value Fund has 26% of its portfolio in overseas stocks and has given a return of 4% with exposures to Microsoft, Berkshire Hathaway, and Nike, among others.

Multi-asset allocation funds, like the DSP Multi Asset Allocation Fund, has 20% global allocation and the Axis Innovation Fund has a 15% global allocation.

Other notable examples include the SBI Technology Opportunities Fund (11.3%), Parag Parikh Flexi Cap Fund (11.1%), and SBI Focused Equity Fund (10.2%).

Why to do?

From a currency perspective, investing in global assets can also help hedge against rupee depreciation over the long term. Historically, the rupee has depreciated against the US dollar at an average of 3–4% annually, which can boost returns from dollar-denominated assets.

International investing should not be seen as a luxury—it’s a smart diversification strategy. Even if direct international funds remain closed to new inflows, there are multiple open-ended funds in India that quietly give you exposure to global leaders. Allocating 5–10% of your equity portfolio to such funds can reduce risk, enhance returns, and make your investments truly global.

By looking beyond India’s borders, investors can tap into the best of both worlds, participating in the India growth story while also benefiting from innovations, trends, and economic cycles playing out worldwide.