International Mutual Funds: Meaning, Types and Advantages
Investors who want to invest outside of the Indian market can invest in international mutual funds. These foreign mutual funds in India represent a dynamic and increasingly popular investment avenue in today’s interconnected global economy. Many investors look to expand beyond their home countries and invest internationally in equity investments. International Mutual Funds provide an effective way to achieve this global diversification. In this blog, we will explore the meaning, types, advantages and features of the best international mutual fund in India. Let’s begin.
Best International Mutual Funds in India for 2025
Here is a list of the best international funds in India based on their 5-year CAGR:
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the list is from 13th January 2024. This data is derived from the Tickertape Mutual Funds Screener.
- Plan: Growth
- Category: Thematic Funds: MNC and Global
- CAGR 5Y: Sorted from Highest to Lowest
Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Top 10 International Mutual Funds 2025
Nippon India Taiwan Equity Fund
Nippon India Taiwan Equity Fund invests in Taiwanese companies, mainly in technology and electronics. The fund focuses on semiconductors and IT hardware, giving Indian investors a way to participate in Taiwan’s technology-driven manufacturing and export economy.
ICICI Prudential NASDAQ 100 Index Fund
ICICI Prudential NASDAQ 100 Index Fund follows the NASDAQ-100 Index by investing in US-listed non-financial companies. Its portfolio includes global leaders in technology, consumer goods, and healthcare, giving Indian investors exposure to innovative businesses in digital, biotech, and consumer sectors.
Motilal Oswal S&P 500 Index Fund
Motilal Oswal S&P 500 Index Fund tracks the S&P 500 Index, which includes 500 of the largest US companies. The fund provides diversified exposure across sectors such as technology, healthcare, energy, and finance, reflecting the performance of the US equity market.
Nippon India US Equity Opportunities Fund
Nippon India US Equity Opportunities Fund invests in US-listed companies with strong global presence. It spreads investments across consumer, technology, and healthcare sectors, allowing Indian investors to access opportunities in the world’s largest equity market.
Nippon India Japan Equity Fund
Nippon India Japan Equity Fund invests in Japanese companies across automobiles, electronics, and industrials. It gives Indian investors access to Japan’s advanced economy, technological innovation, and manufacturing strengths. The fund also provides geographical diversification beyond domestic equity allocations.
Aditya Birla Sun Life International Equity Fund
Aditya Birla SL International Equity Fund invests in global equities across developed and emerging markets. The fund focuses on leading international companies in diverse industries. It provides geographical diversification and exposure to growth trends in different global economies and sectors.
ICICI Prudential US Bluechip Equity Fund
ICICI Prudential US Bluechip Equity Fund invests in large-cap US companies listed on NYSE and NASDAQ. Its portfolio includes globally recognised businesses in technology, healthcare, and consumer sectors. The fund provides exposure to the performance of US blue-chip companies with strong global operations.
Franklin Asian Equity Fund
Franklin Asian Equity Fund invests in equities across Asian markets, excluding Japan. It provides exposure to high-growth economies such as China, South Korea, and India. The fund covers sectors like technology, finance, and manufacturing and gives access to Asia’s expanding economic landscape.
How to Invest in International Mutual Funds?
You can easily start to invest in international funds by following these steps:
- To invest in the best international mutual funds, you can visit a mutual fund investment platform such as smallcase.
- The next step is to research and identify the international mutual funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a international mutual fund SIP, and complete the process.
What are International Mutual Funds?
International mutual funds are those that invest in foreign equity mutual funds, typically outside of India. These funds pool investors’ money to buy securities such as stocks, bonds, and other financial assets across overseas markets. The goal of these funds is to provide global diversification and capture investment opportunities from international economies, including developed and emerging markets.
Taxation of International Funds as per the Union Budget of 2024-25
As per the Union Budget of 2024-25, short-term capital gains (STCG) from international mutual fund investments held under 24 months are taxed according to the investor’s income tax slab. Long-term capital gains (LTCG) from investments held over 24 months are taxed at 12.5%. This new tax framework benefits investors by reducing LTCG tax rates from the previous 20%.
| Type of Capital Gain | Holding Period | Tax Rate | Exemption / Threshold |
| Short-Term Capital Gains (STCG) | Less than 12 months | 20% flat | No exemption |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.50% | Gains up to ₹1.25 lakh per financial year exempt |
Types of International Funds
- Global Funds: These global investment funds invest across the world, including in the investor’s home country. Unlike overseas mutual funds, global funds also include domestic markets.
- Regional Funds: These funds focus on a specific region, such as Asia, Europe, or Latin America, offering targeted exposure.
- Country Funds: These foreign equity mutual funds invest in companies from a single country, such as the US or European nations.
- Global Sector Funds: These funds invest across different countries within specific sectors like technology, healthcare, or energy.
Features of International Mutual Funds
- Global Diversification: Investing in international diversified mutual funds offers a broad exposure to global markets. This diversification helps mitigate risks associated with downturns in any single economy. Top-performing international funds give investors access to various sectors worldwide.
- Asset Variety: Overseas mutual funds invest in various asset classes, including global equity mutual funds in India, stocks, bonds, and commodities. Funds focusing on US stocks mutual funds are a popular choice for exposure to one of the world’s largest economies.
- Currency Exposure: With investments in international assets, there is an inherent currency exposure as exchange rate fluctuations can affect the returns on foreign equity mutual funds.
Advantages of Investing in Foreign Mutual Funds
- Diversification: Global mutual fund schemes provide exposure to foreign equities and international markets, which may behave differently from Indian markets, potentially reducing portfolio risk.
- Growth Exposure: Global mutual funds invest in industries and economies outside India, offering access to growth trends in other regions.
- Inflation Consideration: Some investors use overseas mutual funds to balance domestic inflation exposure, as performance may differ from Indian funds during inflationary periods.
Risks Involved While Investing in International Equity Funds
- Currency Fluctuations: The value of your investment can fluctuate due to changes in exchange rates, particularly if the fund invests in currencies other than the Indian Rupee.
- Country-Specific Risks: Investing in foreign markets comes with risks specific to that country. Political instability or economic crises can negatively affect the value of foreign equity mutual funds.
- Liquidity Risk: Some international markets are less liquid than Indian markets, which may affect the ease of buying or selling securities, leading to higher transaction costs.
- Company-Specific Risks: Like domestic stocks, international investments are exposed to company-specific risks such as mismanagement, product failures, or legal issues.
Factors to Consider Before Investing in International Mutual Funds
- Geographic Diversification: Consider the regions or countries the fund invests in. International mutual fund portfolio ideas should align with your broader diversification strategy.
- Expense Ratio: The expense ratio reflects the annual fees charged by the fund. A lower expense ratio can positively impact overall returns, especially for low-risk international funds.
- Tax Regulation: International investments may have different tax implications than domestic investments. Be sure to consult a tax advisor to understand the taxation of overseas mutual funds.
Who Can Consider Investing in International Mutual Funds?
- Access to Global Companies: International mutual funds invest in companies listed outside India, providing exposure to global market leaders that are not available on Indian stock exchanges.
- Market Diversification: Different markets often perform differently at the same time. International funds include assets from multiple countries, offering exposure beyond the domestic market.
- Long-Term Investment Perspective: These funds hold global assets that can form part of a long-term investment strategy, including retirement planning or building a financial corpus over time.
To Wrap It Up…
Investing in international mutual funds offers an effective way to diversify your portfolio and gain exposure to global markets. With careful research and an understanding of global fund investment tips, investors can leverage the potential growth offered by the world’s largest economies and emerging markets.
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Frequently Asked Questions About International Mutual Funds
Investors often hold international mutual funds for multiple years. Historical data shows that returns can fluctuate over short periods, with long-term trends varying by market conditions.
These funds invest in companies and securities outside the investor’s home country, providing exposure to foreign equity markets and global economies.
Returns differ based on market performance, currency movements, and economic conditions. Historical performance can provide context but does not indicate future outcomes.
International funds carry risks, including currency fluctuations, geopolitical events, and global market volatility. These factors can affect fund performance over time.
Investors can access US mutual funds through regulated investment platforms, including smallcase and Tickertape. Options include systematic investment plans (SIPs) or lump-sum investments, depending on individual preference.
