Mutual Fund investors based on domestic equities have faced topsy-turvy times in the last year or so. The Indian benchmarks have been in a range bound journey and are clueless amidst the economic slowdown and carnage happening on INR arena.
In response to all this, the market pundits are re-emphasizing on the diversification term. Diversification aims to invest in different variants of assets such as real estate, gold, debt, equity to reduce the overall risk of one’s portfolio. This is on a premise that when one type of asset is doing poorly, another will make up for it.
Another variant of this diversification theme is “International diversification”. It aims to invest in a number of countries around the world. Different countries have their inherent risks. If one has investments across different countries then the exposure to such country-specific risks is then considerably lower.
The Indian investor has a way out to achieve this diversification by investing in foreign assets through domestic mutual funds. A lot of international equity funds are available through Indian AMCs with varied geographical biases. The recent offering on this line was ICICI Prudential U.S Bluechip Equity Fund for which the subscription closed on 2nd July 2012.
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