International mutual funds reopen for subscription. Should you invest or sit it out?

Over the last two weeks, around six international mutual funds have reopened for fresh investments, following strong performance across global markets.

ICICI Prudential Mutual Fund announced resumption of fresh investments in three of its international schemes, ICICI Prudential US Bluechip Equity Fund, ICICI Prudential NASDAQ 100 Index Fund, and ICICI Prudential Strategic Metal and Energy Equity Fund of Fund, starting January 27.

Aditya Birla Sun Life Mutual Fund has also reopened fresh investments in three international equity schemes, Aditya Birla Sun Life International Equity Fund, Aditya Birla Sun Life Global Emerging Opportunities Fund, and Aditya Birla Sun Life Global Excellence Equity Fund of Fund, starting early January.

This comes at a time when global equities have delivered strong gains, prompting renewed investor interest.

How have these funds performed?

International equity funds have delivered strong returns over the past year, led by US, global innovation, China and emerging market strategies. Several schemes have posted one-year gains of 40-50 percent, while diversified global equity funds have returned 20-35 percent.

“Over the last three years, ICICI Prudential NASDAQ 100 Index has delivered a CAGR of 34 percent, Edelweiss US Technology 37 percent, Franklin U.S. Opportunities 24 percent and Kotak Global Innovation 24 percent, meaningfully outperforming Indian large-cap equities,” said Vijay Maheshwari, founder of Stocktick Capital. “This reflects sustained earnings leadership in US technology, innovation-driven businesses and global sector leaders.”

The longer-term picture, however, is more mixed. Over three years, most international funds have delivered returns in the 15-25 percent range. Five-year performance weakens further, with many schemes reporting high single-digit or low double-digit returns. Only a limited set of funds have managed to sustain five-year returns above 12-15 percent, highlighting the gap between short-term rallies and long-term consistency.

Maheshwari said emerging market and China-focused funds show wide dispersion, with sharp one-year spikes but inconsistent three-year outcomes, underscoring that selectivity matters more than geography.

Access remains uneven across schemes. While SIPs are widely available across most international funds, lump sum investments are restricted in several offshore and region-specific offerings, nudging investors towards staggered allocations.

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Does global exposure make sense today?

Indian investor portfolios remain heavily skewed towards domestic assets, making global exposure less about chasing returns and more about diversification. International funds provide access to sectors that are under-represented or absent in Indian markets. “Global funds provide access to sectors under-represented domestically, Big Tech, AI, semiconductors, global healthcare and the energy transition,” Maheshwari said.

• Currency and earnings diversification benefits Currency diversification adds another layer of benefit. Over long periods, rupee depreciation has enhanced rupee returns from dollar-denominated assets. Global investing also broadens earnings exposure to companies that command a disproportionate share of global profits and cash flows.
• Risks that investors cannot ignore The risks, however, need careful management. Valuations, especially in US technology, are elevated, thematic funds carry concentration risk, and currency movements can add volatility. Maheshwari said, “Some offshore schemes also operate with constraints such as SIP caps, making portfolio structure and position sizing critical.” sizing critical.”
• How much global exposure is enough? Most experts favour measured allocations. Retail investors are typically advised to allocate 5-10 percent of equity exposure internationally, while affluent investors may raise this to 10-20 percent, and up to 25 percent in select cases. “A core-satellite approach works best, with the core built through broad US or global index funds and the satellite limited to one innovation-led, sectoral or emerging market fund, with strict caps,” Maheshwari said.
• GIFT City expands access to global markets Access to global markets is also improving. “GIFT City (IFSC) adds a powerful new dimension by enabling India-based access to global markets through IFSC-domiciled funds and platforms. It offers greater scalability, operational efficiency, faster execution, and in many cases improved cost and tax efficiency versus traditional offshore routes,” Maheshwari adds.

International investing works best as a supporting player, not a substitute for India. Experts suggest investors start small, start small, diversify thoughtfully, consider GIFT City for easier global access, and review your allocation once a year. The idea is to build steady, long-term growth, not to chase last year’s top performers.