Missed out on international funds? These domestic schemes offer global exposure

US equities have delivered up to 50 percent returns over the past year, outperforming Indian markets and quietly pushing portfolio allocations higher than intended.

Over the past year, the difference has been hard to ignore and it’s not just at the fund level. Global indices have seen a sharp rally. Japan’s Nikkei 225 has surged nearly 63 percent, while the S&P 500 has delivered nearly 30 percent.

In comparison, Indian indices such as Sensex and Nifty50 have posted negative return of around 4 percent.

So, why aren’t more people investing globally?

International mutual funds in India are always open for subscription. They often pause fresh investments, both SIPs and lump sums, after hitting investment limits set by the Reserve Bank of India and the Securities and Exchange Board of India.

So, even if you want global exposure, you may not always be able to access it directly.

The workaround most people miss

Here’s the interesting bit: you might already be investing globally, without realising it.

Several domestic mutual funds quietly invest a part of their portfolio in overseas stocks. So, even if you’re investing in an “Indian” fund, a slice of your money could be riding global markets.

We looked at domestic funds with at least 3 percent exposure to overseas equities (anything lower doesn’t really move the needle). The numbers throw up some interesting trends.

Who’s investing the most overseas?

If you’re wondering how much “global” exposure you can actually get through domestic funds, the answer is: more than you’d expect, at least in some cases.

At the top end, a handful of funds are allocating 10-25 percent of their portfolio overseas. Edelweiss Technology Fund, for instance, has the highest overseas exposure at 26.6 percent followed by DSP Healthcare Fund at 18.1 percent, Franklin India Technology Fund 13.4 percent and SBI Technology Opportunities Fund at 13.1 percent..

What stands out immediately is the pattern, most of the high overseas exposure is coming from sectoral or thematic funds, especially technology and healthcare.

Then you have diversified funds with more measured exposure. SBI Focused Fund allocates 12.5 percent, DSP Value Fund 10.9 percent and Parag Parikh Flexi Cap Fund 10.6 percent towards international stocks.

Here, overseas investing is more opportunistic than structural, used to complement the portfolio rather than drive it, , industry experts say.

Many funds sit in the 3-9 percent range, which is more of a tactical allocation, enough to benefit from global trends but not enough to dramatically change portfolio behaviour.

Where global exposure is actually working

Across categories, several domestic funds with overseas exposure have delivered healthy gains over the past year, showing how global allocation can quietly add to returns when markets are supportive.

Leading the pack are funds with a mix of themes and asset classes with ICICI Prudential Commodities Fund, DSP Multi Asset Allocation Fund, SBI Children’s Fund and SBI Focused Fund.  Even among more growth-oriented strategies, performance has held up reasonably well like Axis Innovation Fund, Aditya Birla SL Dividend Yield Fund and Edelweiss Technology Fund.

But here’s the catch 

Of course, not every fund has participated equally. Some technology-heavy schemes, such as Franklin India Technology Fund and SBI Technology Opportunities Fund, have seen mild declines over the past year, reflecting the more volatile nature of tech cycles.

The same funds with higher global exposure, especially tech-heavy ones, have taken a hit this year.

However, funds with moderate overseas exposure and more balanced portfolios are actually holding up well, even in the current market.

What this shows is that global exposure has been a contributor, not a drag, over a slightly longer time frame.

Why this still matters

Even with the recent volatility, industry experts say global exposure isn’t a bad idea, it’s just not a free lunch.

It gives you access to companies and sectors that don’t really exist in India at the same scale, think Apple, Microsoft or Nvidia.

So if you’ve been waiting for international funds to reopen, it’s worth checking your existing portfolio first.

You might already have global exposure, just not in the way you expected.