Benefits of Investing in Global Funds

Thanks to the advancement in the world of investing, people do not have to depend on conservative investing tools anymore of income generation. Back in the day, middle income earners only had options like bank FDs and post office savings schemes for investment. The problem with conservative schemes is that they have lengthy lock in periods, offer fixed interest rates and do not have any liquidity. Also, the interest rates that they offer is generally on the lower end and may not be adequate enough for investors to achieve their life’s short term or long term financial goals. In the recent past, mutual funds have offered decent capital appreciation for investors seeking capital appreciation over the long term. For those who aren’t aware, mutual funds are a pool of professionally managed funds that offer active risk management. The reasons mutual funds have found success with generating far more returns than conservative schemes are because they invest in a diversified portfolio of securities.

What Asset Management Companies owning mutual funds do is that they collect money from investors sharing a common investment objective and invest this pool of funds across various asset classes and marketable securities. Depending on the nature of the scheme and its investment objective, a mutual fund may invest across various money market instruments including equity, debt, gold, real estate, corporate bonds, G-sec, etc. In order to help investors, make an informed investment decision, market regulator SEBI has further categorized mutual funds based on their unique characteristics like asset allocation strategy, investment objective, risk profile etc.

Of the several mutual fund categories, equity schemes have been the most sought after mutual fund schemes that are known to offer far better capital appreciation as compared to other investment vehicles. They have a high risk rewards ratio and have historically become offered exceptional returns over the long term. This is why mutual fund experts recommend investors to keep a long term investment horizon while investing in equity schemes. Thanks to the introduction of equity schemes like global funds, it is now possible for investors to even seek capital appreciation by investing in international markets and economies. 

What are global mutual funds?

Global mutual funds or international equity mutual funds are open ended schemes investing across international markets. Investors who carry a moderately high risk appetite and looking for diversification can invest in global funds. 

Benefits of investing in global funds

Today, we as consumers have definitely bought goods or services of global giants that have entered India. Google, Amazon, Microsoft, Facebook are only few of the many names that have become common in Indian households. If we are using their services or buying products online, we are helping their business grow. Then why not invest in such companies when you have the chance to do so. Also, the Indian GDP is facing a slow growth, something that isn’t happening with the foreign economies like the USA. Also, investing in global funds is as easy as investing in any other equity fund. Investors need to make sure that they are KYC complaint in order to start a SIP in global funds. Systematic Investment Plan is an easy and convenient way to invest in global funds. Investors can decide on a monthly investment amount they are comfortable with and invest this amount at periodic intervals. Investors can also refer to an online SIP calculator, a free online tool which might help investors get a fair idea about how much they need to invest in order to achieve success with their investments in global equity funds. Also, those who are new to mutual fund investing are expected to consult a financial advisor before investing.